Libra Electronics has invented a new technology to make laptops that are extremely lightweight and unbreakable. The company is advertising aggressively and wishes to create demand for its new range of laptops. To attract customers, the company has priced the laptops attractively. However, in order to make profits, the company has priced the batteries required for the laptops extremely high. Which of the following is illustrated in this scenario?
A) downsizing strategy.
B) harvest strategy.
C) razor and blade strategy.
D) divestment strategy.
E) switching costs.

Question

Quizplus · Accepted Answer

The scenario illustrates the razor and blade strategy, where the company is pricing the laptops attractively but the batteries required for the laptops are priced extremely high to make profits. This strategy involves selling a product at a low price to attract customers and then selling complementary products at a high price to make up for the low margins on the main product.

Libra Electronics Has Invented a New Technology to Make Laptops