ENTREPRENEURIAL MARKETING
MARKETING MIX
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following describes price skimming?
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Charging a low price initially, and keeping it low to gain additional sales
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Initially setting the selling price of a product low and raising it after a period of time
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Setting a high selling price of a product initially and slowly lowering it over a period of time
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None of the above
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Explanation:
Detailed explanation-1: -A skimming pricing strategy usually involves setting a higher price for a new product when it first enters the market. As the product evolves, the price drops accordingly. Price skimming is often used with high-tech products.
Detailed explanation-2: -Price skimming and penetration pricing are two opposing long-term strategies. Price skimming consists of setting high prices and reducing them over time in order to maximize profit in the long term, while penetration pricing consists of setting low prices and increasing them over time.
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