High Energy,a local supplier of sport drinks,initially sold its product at a premium price of $5 because the company believed consumers would view sport drinks as a prestigious item.The company decided that when start-up costs had been recovered and competition grew,the company would reduce the price to a more reasonable $3.What strategy is High Energy implementing?

Question

Quizplus · Accepted Answer

High Energy is implementing a skimming price strategy, where they initially set a high price to maximize profits from segments willing to pay the premium, and then lower the price over time to attract more price-sensitive customers.

High Energy,a Local Supplier of Sport Drinks,initially Sold Its Product