Multi Tier Pricing vs Flat Pricing

Discussion in 'Growing and Managing a Business' started by pals, Apr 4, 2012.

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Which is better for me: Multi Tier Pricing or Flat Pricing?

  1. Multi Tier Pricing

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  2. Flat Pricing

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  1. pals

    pals
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    Hi peeps,

    Would love to have some advice here.

    Simply put it, my partner and I can not agree upon the pricing structure. Which is better for our business: Multi Tier pricing or Flat Pricing?

    Background:
    We are a start-up looking to stream movies online. Our market currently has no competition (in terms of online video streaming).
    Multi tier pricing has the potential of earning more because we offer cheaper pricing for people who thinks they are minimalist (thus able to attract those on a budget) ~$5.99/mth, and we have the premium pricing for those who want unlimited streaming and movie selections etc (those who wants the best and can afford)~$15.99/mth. Our main target is for consumers to subscribe to our middle tier ~$9.99/mth.

    That said, my partner thinks that it is too complicated for the customers and believe the flat pricing gives simplicity. Every other businesses (such as cable television etc) are doing multi tier pricing, and he said he didn't want our business to look like another business trying to suck the consumer's money. He thinks that we should charge a flat rate of $9.99/mth. No frills, no limits.

    The thing is as I may agree I want to give consumers the feeling of us being a transparent and good company, simple and easy to deal with, I am uneasy with the fact that there is no other way to earn more from the consumers at all. The flat pricing model seems to be working well for other streaming websites in the States (Amazon and Netflix), but I am unsure. Pretty much at war with myself over this matter. :confused:


    I would really appreciate advices about the advantages and disadvantages of multi tier pricing and flat pricing, and also with regards to the situation I am in. Greatly appreciate your help. Thank you.
     
  2. pals

    pals
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    Hi, any advice would be appreciated. Thanks!
     

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