One reason marketers of new,innovative products often start out with a price skimming strategy rather than a market penetration strategy is that
A) few consumers understand a penetration strategy.
B) a price skimming strategy lowers the value for consumers.
C) few marketers understand pricing.
D) it is easier to lower prices than to raise them.
E) price skimming is legal while price penetration is not.

Question

Quizplus · Accepted Answer

Starting with a price skimming strategy allows marketers to target early adopters who are willing to pay a higher price for innovative products, which helps companies recover their development and launch costs quickly. As the product matures and competition increases, the marketer can then gradually reduce the price to attract a larger market share and stay competitive in the market. Lowering prices is often easier than raising them, making a price skimming strategy a more feasible approach for companies launching innovative products.

One Reason Marketers of New,innovative Products Often Start Out with a Price