Common products that use economy pricing
Economy pricing is used a lot in the commodity goods market. It’s a great strategy for companies that have low overhead costs and the ability to sell a larger number of products to new customers on a regular basis. Here are a few examples of economy pricing in today’s market:
Supermarket store brands
Every grocery store you go into has their own version of popular brands. Companies like Trader Joe’s and ALDI are two examples that capitalize on economy pricing to drive their growth.
Generic drugs and medications
Much like supermarket store brands, there are lots of different types of generic over-the-counter medications available through companies like CVS and Rite-Aid.
Big box stores
Companies like Costco and BJ’s take the economy pricing model to the next level by selling primarily their own brands. While name brands are still available, the major draw of these types of stores is the quality-to-price ratio of their generic brands.
Many airlines will provide economy pricing to fill seats in their planes, offering much lower prices for the first seats that are purchased and scaling up the price as availability decreases (which incorporates premium pricing as well).
In the SaaS and subscription markets, economy pricing is less prevalent, but there have been examples of subscription ecommerce businesses that thrive with economy pricing.
One economy pricing example that comes to mind is Dollar Shave Club, which used the strategy to draw customers away from established brand names like Gillette. To do so, it needed to factor in the increased marketing and advertising costs that aren’t typical for most economy pricing companies.