- Understanding Complementary Products
- Illustrative Examples of Complementary Products
- Determining the Impact of Pricing Adjustments on Complementary Products
- Defining Strong and Weak Complementary Goods
- Complementary Goods vs Substitutes: A Comparative Analysis
- Why Brands Opt for Complementary Products?
- Enhancing Customer Experiences with Shiprocket’s Integrated and Personalised Solutions
- Conclusion
Many businesses offer complementary products in addition to their main products. Ever wondered why? Well, it has been noticed that pairing products that work together can increase consumers’ interest in your brand and help boost your sales. It makes the buying experience more fulfilling as they do not have to look for complementary items elsewhere. They get both things under one roof. As per research, offering complementary products along with your main item increases the chances of sales by 20%.
Not sure what complement goods are and how they can prove to be beneficial for the business? We have covered it all for you in this article. Read on to learn all about these essential items.
Understanding Complementary Products
Complementary products mostly do not have any standalone use. They are designed to support the use of the main product. In many cases, the latter is also of no use without the former, for instance, razor and blades, car and fuel, mobile and SIM card. A protective case is also a complementary item for a mobile phone. While a mobile phone can function without it, the case does not have any use without the phone. Though optional, the case adds value to the main product. As a business owner, you can boost customer satisfaction and encourage additional purchases by offering complementary goods.
By offering good quality complementary items, you can ensure that your customers’ primary purchase functions smoothly. This creates a seamless experience for the buyers mainly because they do not have to browse through other sites or visit stores to get complementary items. Also, they will have a single point of contact in case there is some functional glitch. Owing to these reasons, customers prefer shopping from businesses that offer complementary items along with the main product. Thus, you can increase your revenue by offering these goods.
Illustrative Examples of Complementary Products
You will find different types of complementary products across industries. We have already mentioned a few in the earlier section to give you an idea about them. Here is a look at some more:
- Earbuds and Charging Case
- Camera and Memory Cards
- Video Game Consoles and Game Discs
- Toothbrush and Toothpaste
- Contact Lenses and Contact Lens Solution
- Tennis Racket and Tennis Balls
- Laptop and Charging Cable
- Bike and Helmet
- DVD Player and DVDs
- Printer and Ink Cartridges
Determining the Impact of Pricing Adjustments on Complementary Products
When pricing adjustments are made to a main product, it can have a direct impact on the demand for its complementary products. Let us understand the kind of impact it is likely to have:
1. Negative Price Elasticity
Negative price elasticity occurs when an increase in the price of the main product leads to a decrease in the demand for both the main product and its complementary items. This is because the consumers tend to delay the purchase of the primary product until the announcement of a sale or discount offer. They may even avoid its purchase all together if it is not an essential item.
For example, if the price of a popular smartphone increases, many consumers may look for its alternative or wait a few weeks or months till its price comes down. As a result, the demand for its complementary products such as phone cases and screen protectors will also go down. Likewise, those who purchase the phone at a higher price may not opt for complementary items such as accessories to avoid additional costs.
2. Positive Price Elasticity
Positive price elasticity is observed when an increase in the price of the main product actually drives up demand for its complementary products. This scenario is often seen with luxury items. This is because in such cases higher prices often indicate better quality and exclusivity of the product.
For instance, if the price of a high-end handbag rises, it may signal both quality and scarcity. Thus, consumers are likely to purchase it, and the demand for its complementary accessories, such as wallets or scarves, is also likely to go up.
Defining Strong and Weak Complementary Goods
Some complementary goods are said to be strong, while others are considered weak. What makes them differ from each other? Let’s find out!
- Strong Complementary Goods: Also known as perfect complements, they are essential for the functioning of the primary product. Thus, the change in the demand for the main product has a significant change in the demand for its complement. Similarly, the changes in the price of the complementary goods can also impact the demand for the main good. Let us understand this better with the help of a few examples:
- Cars and Fuel: When the sale of cars increases, the demand for fuel increases automatically. On the other hand, an increase in the fuel prices may impact the demand for cars. This is because many people may avoid or delay purchasing a car to keep their overall expenditure in check.
- Printers and Ink Cartridges: As printer sales rise, the demand for ink cartridges will increase significantly as the former cannot function without it. On the other hand, if the price of ink cartridges increases significantly then the demand for printers is likely to go down.
- Laptops and Software: It has been noticed that an increase in laptop sales leads to higher demand for software applications. This is because they enhance the user’s experience. Many of them are even essential for the smooth functioning of the laptop.
- Weak Complementary Goods: These items often enhance the use of the main good but are not essential for their proper functioning. Thus, the demand for the main product may not impact the sale of weak complementary goods as much and vice-versa. They are also referred to as near complements. Let us understand them better with the help of the following examples:
- Coffee and Sugar: Many people prefer adding a spoon or two of sugar to their coffee. However, several others prefer it without sugar. Thus, the demand for sugar is not heavily reliant on that of the coffee. Besides, sugar is also used in various other products.
- Bicycles and Helmets: While many cyclists purchase helmets as a complementary product to their bicycles many others do not. Thus, their relationship is said to be weak. The sale of one may not have a high impact on the demand for the other.
- Books and Bookmarks: This is another example of a weak complementary good. This is because not all readers use bookmarks. On the other hand, many of them prefer making small bookmarks on their own. Thus, a rise in the demand for books may not have a significant impact on the demand of bookmarks.
Complementary Goods vs Substitutes: A Comparative Analysis
Here is a quick look at difference between complementary goods and substitute goods:
| Complementary Goods | Substitute Goods |
|---|---|
| These products are used along with the main product. In many cases, the later can function only if its complement good is clubbed with it. In other cases, a complementary item enhances the usage of the primary product or adds value to it. | These are the products that have similar functionality and thus satisfy similar needs of the customers. They can work as a good substitute for each other. |
| An increase in the price of the primary product is likely to decrease the demand for its complement if they share a strong relationship. | An increase in the price of a product often leads to an increase in the demand for its substitute goods. |
| Its examples include printers and ink cartridges, cereal and milk, badminton rackets and shuttlecock. | Some examples can be tea and coffee, cow milk and soy milk, sugar and artificial sweeteners. |
| In most cases, consumers have to purchase complementary goods along with the main product. | Consumers choose between these products mainly on the basis of their price and quality. |
Why Brands Opt for Complementary Products?
Brands often opt for complementary products to enhance their market presence. By offering such items, you can encourage consumers to purchase additional items that can enhance their experience of using the primary product. In many cases, they are essential for the proper functioning of the main product and are thus a must-buy for your consumers. By offering them, you can help check the item on their shopping list. Customers appreciate the convenience offered by you and are likely to come back for more.
By strategically positioning complementary items, you can maximise revenue from each customer. By offering unique accessories or related products, you can also set your brand apart from your competitors. Many brands offer a range of complement goods which enables them to cater to different customer needs. This is an effective way to enhance customer satisfaction and establish a strong presence in the market.
Enhancing Customer Experiences with Shiprocket’s Integrated and Personalised Solutions
Shiprocket caters to the unique needs of eCommerce businesses. It customises the delivery options as well as shipping rates based on your requirement. Its comprehensive shipping platform laced with the latest technology helps simplify logistics for your business. You can manage your supply chain operations systematically with its seamless integration. It keeps you updated about the status of your order at every step of the process from processing to shipping. Its real-time tracking feature keeps you and your clients informed about the live location of the shipments. This creates transparency which helps build trust among customers and increases satisfaction. It also enables you to take prompt action in case the shipment gets stuck due to unforeseen circumstances.
Shiprocket is committed to enhance your experience and enable you to serve your customers better.
Conclusion
You can increase your business revenue by offering a variety of complementary products along with your main products. By providing items that complement the primary product, you can increase your chances of sales. This is because it offers convenience to the customers. It makes them feel valued and encourages repeat purchases. By strategically pairing complementary products with the main product, you can strengthen your relationship with your clients and get an edge over your competitors.
