A market skimming strategy is most appropriate when customers are highly sensitive to price and when low prices discourage actual and potential competition.

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A market skimming strategy is used when there is little price sensitivity among customers and when there is potential for competition. This strategy involves setting a high price initially and gradually decreasing it over time. The high price is used to generate revenue from early adopters and to establish the product as a premium offering, while the gradual price decrease is used to attract more price-sensitive customers. On the other hand, a market penetration strategy is used when customers are highly price sensitive and there is potential for competition. This strategy involves setting a low price initially to quickly gain market share, and then gradually raising the price to increase profits.

A Market Skimming Strategy Is Most Appropriate When Customers Are