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Question
Give one difference between skimming pricing and penetrating pricing.
Distinguish Between
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Solution
| Basis of Distinction | Skimming Pricing | Penetrating Pricing |
| Price Level | Price is set at a high level | Price is set at a low level |
| Target Market | Rich customers | Common people |
| Main Purpose | To recover investment quickly | To make the product popular |
| Profit Margin | High | Low |
| Sales Volume | Low | High |
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Price - Pricing Strategies
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| Evergreen Cosmetics is planning to launch a new range of 'anti-wrinkle creams' in the Indian market. They conducted a market survey and found potential competition from Remain Young. Since they are targeting the higher strata of society, the cream is being priced much higher than their competitors. They plan to use the television as a media to advertise this anti-wrinkle cream as opposed to print media which is largely used by them for their other products. Officials at Evergreen Cosmetics feel that with the correct style of promotion, they could easily be successful in the market. |
- Identify and explain the pricing strategy that is being used by Evergreen Cosmetics.
- Describe any two qualities that a salesman selling this product should possess.
- Explain any two tools of sales promotion that can be used here.
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