The first generation Apple iPod was introduced in 2001 and sold for $500. The following year a mini version was introduced for $250. Apple initially used a ________ strategy to price their digital music innovation.
A) market-skimming
B) target costing
C) deceptive
D) market-penetration
E) predatory

Question

Quizplus · Accepted Answer

Apple used a market-skimming pricing strategy when they introduced the first generation Apple iPod for $500, which was a premium price at the time. The following year, they introduced a mini version for $250, which is also an example of market skimming. This strategy involves setting a high price initially to capture early adopters and generate high profits, then gradually lowering the price over time to reach a broader market.

The First Generation Apple IPod Was Introduced in 2001 and Sold