Jean Claude has just completed a new line of designer handbags. He wants the price to communicate to the customer that the handbags are high quality and exclusive, so he sets the price high. He knows that after this season, the price may need to decrease as the market evolves. Jean Claude is using a ________ strategy.
A) penetration pricing
B) price skimming
C) target ROI
D) competitor-based pricing
E) value pricing

Question

Quizplus · Accepted Answer

Jean Claude is using price skimming as he sets a high price to communicate to the customer that the handbags are high quality and exclusive. He also plans to decrease the price later as the market evolves. Price skimming is a strategy in which a company sets a high price for its product initially and then gradually decreases the price over time. This strategy is typically used for new and innovative products in order to capture a high profit margin from early adopters.

Jean Claude Has Just Completed a New Line of Designer