In terms of pricing, what are the characteristics of skimming strategies?
Determining or setting a particular value for the product after analyzing the incurred cost is called pricing. Skimming price strategy is one of the methods of pricing, which helps to maximize the company's profit.
Answer and Explanation: 1
The characteristics of skimming strategies are as follows:-
- This strategy is useful when the company launches a new product in the market.
- It focuses on setting the highest price for launching a new product in the market.
- It attracts those customers who are quality-oriented and are willing to spend more on products.
- It always divides the market into segments for targeting high-end customers.
- This strategy helps create a prestigious brand of the company as it launches at a high price, introducing the product as a genuine and premium product.
- It enhances product testing by testing the product while selling it. The high-end customers will give feedback regarding the product quality and price after purchasing a high-priced product at the introductory stage.
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fromChapter 11 / Lesson 5
Consumers' perceptions of products rely heavily on the pricing strategy that is chosen by the marketing manager. Price will impact not only consumer perception but also profit and speed of product adoption.