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What Is Versioning?
Let me explain what versioning is. Versioning, which you might also hear called 'quality discrimination,' is a straightforward business tactic where a company makes different versions of basically the same product and sets different prices for each one. This gives you, the consumer, choices: pay more for a higher-value model or less for a basic one. The goal here is for the business to pull in higher prices by matching what you see as valuable.
Key Takeaways
- Versioning means producing different models of the same product and selling them at different prices.
- It's most effective when products have high fixed costs but low variable costs, making it easy to tweak versions.
- You'll see this in industries like cars, software, subscriptions, and even food products.
Versioning Explained
You typically see versioning when a product involves big upfront fixed costs but small costs to vary it. Take software: companies add or remove features to create versions at different prices, fitting what different customers are willing to pay. If you're ready to spend more, you go for the premium version; if not, the basic one suits you.
This shows up across many fields. In tech, think tablets or smartphones with options like more storage or better screens— a top model might have high-res video and extra controls that cheaper ones lack.
Often, you'll find a no-frills budget version with just the essentials at a low price, and then a luxury one loaded with features and quality at the high end.
Examples of Versioning
Look at software suites for a clear case. Microsoft offers its Office programs in versions like home, personal, or student, and business tiers that bundle different apps and services based on what you pick.
Subscription TV services, whether cable or satellite, do this too—they package channels at rising prices, saving premium ones for the expensive plans.
In cars, it's all about options on the base model: add a better sound system, internet connectivity, roadside help, stronger engines, or seating tweaks to change capacity and price.
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