Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and ________ pricing.
A) comparative
B) competitive
C) market-skimming
D) market-segmentation
E) cost-plus

Question

Quizplus · Accepted Answer

Market-skimming pricing is typically the best choice for companies facing the challenge of setting prices for the first time. Market-skimming involves setting a high price for a new product or service, with the goal of maximizing profits before competitors enter the market. This strategy is most effective for companies introducing highly innovative or unique products or services, as they can capitalize on early adopters who are willing to pay a premium price. Market-penetration pricing, on the other hand, involves setting a low price to quickly gain market share, which is generally not as effective for new products or services without an established brand or customer base. Competitive pricing, market-segmentation pricing, and cost-plus pricing can also be effective pricing strategies, but may not be the best choice depending on the specific circumstances of the company and its product or service.

Companies Facing the Challenge of Setting Prices for the First