9 Market-skimming pricing strategy Market skimming is an attempt to exploit those sections of the market which are relatively insensitive to price changes. Initially high prices may be charged to take advantage of the novelty appeal of a new product when demand is initially inelastic.
A skimming policy offers a safeguard against:
§ unexpected future increases in costs
§ a large fall in demand after the novelty appeal has declined.
Once the market becomes saturated the price can be reduced to attract that part of the market that has not been exploited.
Conditions suitable for a market-skimming strategy are:
§ Where the product is new and different and has little direct competition:
- Customers are prepared to pay high prices so as to be ‘one-up’ on other people who do not own one.
§ Where the strength of demand and the sensitivity of demand to price are unknown:
- It is much easier to lower prices than to increase them.考试用书
- From a psychological point of view it is far better to begin with a high price, which can then be lowered if the demand for the product appears to be more price sensitive than at first thought.
§ Where high prices in the early stages of a product’s life might generate high initial cash flows:
- A firm with a liquidity problem may prefer market skimming for this reason.
§ Where products have a short life cycle, and there is a need to:
发表于 2012-2-23 17:09:42
