![]() ![]() This can rapidly recover the expense of product development and create a consistent initial profit. This helps brands in channelizing their initial endeavors toward upper-market sections that do not care about the higher prices. The price skimming methodology implies that brands have to intently manage their item’s direction just after its launch because the excitement for the item will probably be going to be at its peak in the beginning. This pricing strategy is viable for companies that are first movers, who are new entrants and face negligible competition. This strategy works in contrast to penetration pricing (this strategy grabs a market share through lower prices set initially).Īlso Read Advertising Message - Definition, Meaning, Importance and ComponentsĪfter it has set a high initial price, the company gradually brings down its prices to target customers having price sensitivity in their minds. The price skimming strategies come from the task of skimming different layers of ice cream. The company works in a strategized manner, and it first satisfies the demands of the customers who are willing to pay higher prices and then enters the crowded market segments where people are a bit price sensitive. Hence, many innovative companies will use the price skimming method. ![]() When you are doing all this, you would of course keep the price of the product high to get the benefits in return. If you are going to bring a unique product, you need to invest in R&D, think out of the box and take a risk in launching the new product. We all know that innovation comes at a cost. Price skimming is a strategy used for product pricing in which the company charges the highest possible price initially and then eventually brings down the price over time for targeting more price-sensitive customers. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |