price skimming

• When is pricing skimming used?

  When launching a new product
• Give 2 benefits of price skimming?

  High starting price can establish an upmarket image

  Can be a great way to harvest high profits from early buyers - innovative products
• Give 2 drawbacks of price skimming?

  Cheaper limitations of the product

  Risky - people will purchase when cheaper
• What is price skimming

  A strategy used to set high prices at the start to create profits and then reduced when competitors enter the market