You are introducing a new product to the market; in fact, you are first with this new product to the marketplace. In developing your pricing strategy, it was decided that the price of the product should be at the maximum the market would bear. This is an example of what type of pricing strategy?
A) going-rate pricing
B) prestige pricing
C) product-quality leadership
D) market-skimming pricing
E) market-penetration pricing

Question

Quizplus · Accepted Answer

Market-skimming pricing is a strategy where a new product is launched at a high price to maximize profits while the product is new and innovative. Since the product is the first of its kind in the market, the company can take advantage of the initial demand to charge a higher price. This strategy is often used to recover research and development costs quickly.

You Are Introducing a New Product to the Market; in Fact