BUISENESS MANAGEMENT
MARKETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Setting an initially high price which falls as competitors enter the market.
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Setting a high price which consumers perceive as indicating high quality.
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Setting a low price to “Skim off” a large number of consumers.
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None of the above
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Detailed explanation-1: -Skim pricing, also known as price skimming, is a pricing strategy that sets new product prices high and subsequently lowers them as competitors enter the market. Skim pricing is the opposite of penetration pricing, which prices newly launched products low to build a big customer base at the outset.
Detailed explanation-2: -Price skimming is a product pricing strategy by which a firm charges the highest initial price that customers will pay and then lowers it over time.
Detailed explanation-3: -a pricing approach in which the producer sets a high introductory price to attract buyers with a strong desire for the product and the resources to buy it, and then gradually reduces the price to attract the next and subsequent layers of the market.
Detailed explanation-4: -Price skimming is sometimes referred to as riding down the demand curve.
Detailed explanation-5: -Price skimming is a pricing strategy that involves setting a high price before other competitors come into the market.