Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and ________.
A)market-level pricing
B)market-competitive pricing
C)market-skimming pricing
D)market-price lining
E)market-price filling

Question

Quizplus · Accepted Answer

Market-skimming pricing involves setting a high price for a new product in order to recover costs quickly and generate high profits. This strategy is appropriate for products with unique features or perceived value, and for companies that have invested heavily in research and development. Market-penetration pricing, on the other hand, involves setting a low price to gain market share quickly and discourage new competitors. This strategy works well for products that are highly price-sensitive and where the company has a cost advantage over competitors. Market-level pricing, market-competitive pricing, and market-price lining are not commonly used pricing strategies. Market-price filling is not a recognized pricing strategy.

Companies Facing the Challenge of Setting Prices for the First