What pricing strategy involves setting levels of product prices across different ranges?

The pricing strategy that involves setting levels of product prices across different ranges is known as price lining. This approach allows a company to group several products within a particular category—essentially creating different price tiers based on features, quality, or other attributes. For example, a manufacturer might offer a basic model, a mid-range model, and a premium model of a product, each at increasing price points. This strategy helps to simplify the decision-making process for consumers by clearly defining what features come at what price level and encourages them to spend more by showcasing the benefits of higher-priced options.

Using price lining effectively can help businesses optimize their offerings, appeal to different segments of the market, and increase sales by capturing consumers at various price points, which can also enhance perceived value. This strategy capitalizes on the consumer's willingness to pay more for additional features or a higher-quality product while still catering to budget-conscious shoppers.