Question

When a company sets a high price for a new product with the intention of reducing the price in the future, it is using the ________ pricing strategy.market-penetrationcompetitivecost-plusmarket-skimmingmarket-segmentation

Answer 1

Answer:

Market Skimming

Explanation:

Market skimming is a pricing technique whereby producers and organizations set high introductory prices in order to attract buyers with strong affinity for the products and who possess the resources to buy it, Then over time continue to gradually reduce to products so others in the market could afford it. It is also known as price skimming, involves setting high prices for a product just launched in the market. A highly selective market is where techniques like this thrives.

Answer 2

Answer:

The answer is Market-skimming

Explanation: Market Skimming refers to a pricing approach whereby the manufacturer of a product or service sets a high introductory price in order to attract buyers who have a strong desire for the product and who possess the resources needed to purchase the products or services, this pricing strategy is implemented with the intention that it will gradually be reduced in order to attract the next and subsequent layers of the market.

Examples of implementation of market skimming strategies include; Apple iPhone and other products, Sony PlayStation 5, etc.

Advantages of Market skimming include:

- Helps to build a high-quality image and perception of the product.

- Helps in cost recuperation, meaning that It helps a firm quickly recover its costs of development.

-High profitability, this means that it helps to generates a high profit margin for the company.