Skimming pricing is a strategy that introduces a new or innovative product by
A)following competitors' leads.
B)creating multiple price points.
C)setting a high initial price.
D)setting a low initial price.
E)setting the price at a pre-determined percentage below its nearest competitor's price.

Question

Quizplus · Accepted Answer

Skimming pricing involves setting a high price initially for a new or innovative product. This is because the product is unique and has no close substitutes in the market. The high initial price helps to recover the costs incurred in research and development, and also helps to signal the quality and exclusivity of the product to early adopters who are willing to pay a premium. As the product gains wider acceptance, the price may be lowered gradually to attract more price-sensitive customers.

Skimming Pricing Is a Strategy That Introduces a New or Innovative