Which term is used to describe the practice of offering multiple versions of the same product at different price points?

• A. Tiered pricing
• B. Product differentiation
• C. Product versioning
• D. Version control

Answer: (C)

Product versioning is a pricing strategy where a company creates several distinct versions of the same product and charges different prices for them. Each version offers a different set of features or service levels, letting customers choose the version that matches their needs and budget. This approach helps capture different levels of willingness to pay and can boost overall revenue by nudging users toward higher-priced, feature-rich versions as they see value in the extras. For example, software often comes in Basic, Pro, and Enterprise editions; a car may have different trims with more features at higher prices; streaming services offer tiers with varying access and quality. This is different from tiered pricing, which mainly changes price based on usage or quantity rather than introducing separate product variants. It’s also distinct from version control, which tracks changes in software, and from product differentiation in a broader sense that may involve branding or design beyond feature-based versions.