George Castilla willingly paid $499 for an Android phone on the day it hit the market even though it was far more expensive than the cell phones he had bought in the past. He wasn't concerned about the price as he wanted to be one of the first on his campus to have this product. Consumers like George are the target of firms using skimming pricing strategies.

Question

Quizplus · Accepted Answer

Skimming pricing strategy involves setting a high price for a new product initially to target early adopters who are willing to pay a premium to have the product first, and then gradually reducing the price as the product becomes more widely adopted. George's behavior of willingly paying a high price to be one of the first on his campus to have the product is exactly what the skimming strategy aims to achieve.

George Castilla Willingly Paid $499 for an Android Phone on the Day