Question

______ price refers to the high initial price charged when a new product is introduced in the market.

Options

• Premium

• Penetration

• Skimming

• None of these

Answer 1

Skimming price refers to the high initial price charged when a new product is introduced in the market.

Explanation:

Skimming pricing is a strategy where a high initial price is set for a new product to maximize profits from segments of the market willing to pay the premium price. Over time, the price is gradually reduced to attract more price-sensitive customers. This approach helps companies recover their development costs quickly and target consumers who perceive the product as valuable and are willing to pay more for it.