Part A4 · Price Discrimination and Bundling

Two-part Pricing and Versioning

Two-part pricing charges a fixed fee plus a usage price. Versioning sells the same product at several quality levels so customers sort themselves.

Two-part Pricing and Versioning · Illustrated by Hendra Saputra with AI assistanceSelect the illustration to explore it at a larger size.

The idea

A monthly fee captures the value of access, while a low unit price encourages usage. Versions such as speed-capped unlimited, app-only or night-only packs are often the same network with deliberate limits. That is fine and can widen access, as long as the limits are clear before purchase.

Use it thoughtfully

  • State every speed cap and app limit on the offer.
  • Use versions to serve lower budgets.
  • Review whether a cheap version cannibalises full packs.

An example

ILLUSTRATIVE EXAMPLE: A social-only pack lets budget users stay connected to messaging apps, with the app list printed on the purchase screen.

A question to try

Could a customer understand every limit of your cheapest version before they pay?

A useful framework is a starting point, not a guarantee. Effects vary with the audience, product and situation. Use truthful evidence, respect customer choice, and test the result.

Connect the ideas

Illustration

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