Price Skimming

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Description of Price Skimming. Explanation.

Definition of Price Skimming. Description.

Price Skimming is a market-based approach to pricing wherein a high price is charged in initial market maturity stages to ' cream off the market'. Prices are set high in order to attract the least price-sensitive customers and to generate profit quickly, before competitors enter the market and start to force price erosion.

It is an attractive strategy for small, highly innovative companies with a new and unique product. Prices can and should be lowered after the cream has been skimmed. An associated advantage with this pricing method is its contribution to building the value of a brand or of the reputation of a firm. The method is also useful for prestige products and in general for products where demand is relatively inelastic (customers are not very price sensitive).

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Best Practices - Price Skimming Premium

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Resources - Price Skimming Premium Overview of Pricing and Pricing Strategies This presentation contains an overview of various ... Usage (application): Pricing     News about Price Skimming         Videos about Price Skimming         Presentations about Price Skimming         Books about Price Skimming         More about Price Skimming

Compare with: Product Life Cycle  |  Marketing Mix  |  Promotional Pricing  |  Competitive Pricing  |  Discount Pricing  |  Cost-plus Pricing  |  Standard Cost Pricing  |  Marginal Cost Pricing  |  Target Pricing  |  Penetration Pricing  |  Psychological Pricing  |  Perceived Value Pricing

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