A retailer has exclusive distribution for a new product in its market area,views the market as price inelastic,and desires an early-recovery-of-cash objective.What pricing strategy should it pursue?
A) market pricing
B) price competition
C) market penetration
D) market skimming

Question

Quizplus · Accepted Answer

Market skimming is a pricing strategy where a company sets a high price for a new product to maximize profits in the short term before competitors enter the market. Since the retailer has exclusive distribution, it can use this strategy to take advantage of the price inelastic market by charging a premium price. This will lead to an early recovery of cash as the high price will generate high profits from early adopters who are willing to pay a premium price for the new and exclusive product.

A Retailer Has Exclusive Distribution for a New Product in Its