Definition (1):
Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.
Definition (2):
It means to offer a lesser price per unit for purchasing the same type’s two or more products when purchased together than when purchased singly.
Definition (3):
“Selling a product at a price lower than that of other products of the same category is called Multiple Unit Pricing. This is true, especially in case of bulk orders.”
Generally, companies use a multiple-unit pricing strategy in the following cases:
- For pushing the sales of a product.
- For exhausting the existing stock of products lying for many days, especially, the expiry date of which is on the border.
- For penetrating the market with a new product.
- For customized deals and bulk orders.
- For penetrating the market with an existing product.
Multiple-unit pricing is quite helpful in the above cases. But it decreases the products’ profit margin for a company. It also decreases the profit margins of marketing intermediaries such as distributors and retailers. This pricing is also troublesome for keeping records.