Which of the following is true of skim pricing?
A)Skim pricing is most profitably used in the decline stage of the product life-cycle.
B)Skim pricing is most useful to a business when there are many competitors in the market offering equivalent products.
C)Skim pricing is most effective when product differentiation is diminishing,potential customers are price sensitive,and many competitors or substitutes exist.
D)In skim pricing,a company tries to keep its costs as low as possible and to offer a low price that no competitor can beat.
E)Skim pricing is viable when a business has a sustainable differentiation advantage in a quality-sensitive market with few competitors.

Question

Quizplus · Accepted Answer

Skim pricing is viable when a business has a sustainable differentiation advantage in a quality-sensitive market with few competitors. This means that the business can charge a higher price for its product because customers are willing to pay for the unique quality or features it offers. Skim pricing is not effective when there are many competitors offering equivalent products or when potential customers are highly price-sensitive. Additionally, skim pricing is typically used during the introduction stage of the product life-cycle, not the decline stage. Option D is incorrect because skim pricing typically involves charging a premium price, not a low price.

Which of the Following Is True of Skim Pricing