A pricing strategy where the price is set high initially to maximize early profits.

A pricing strategy where the price is set high initially to maximize early profits.

• A. Discount
• B. Penetration Price
• C. Skimming Price
• D. Marketing Mix

Answer: (C)

Setting a high price at the launch to capture early profits is the essence of price skimming. This approach targets early adopters willing to pay more for a new or unique offering, helping to recover development and launch costs quickly. As demand at that high price tapers or competition rises, the price is gradually reduced to attract more price-sensitive customers. This is distinct from discounting, which lowers price to boost sales across the board, and from penetration pricing, which starts with a low price to gain market share. Marketing mix is a broader framework, not a specific pricing strategy.

Setting a high price at the launch to capture early profits is the essence of price skimming. This approach targets early adopters willing to pay more for a new or unique offering, helping to recover development and launch costs quickly. As demand at that high price tapers or competition rises, the price is gradually reduced to attract more price-sensitive customers. This is distinct from discounting, which lowers price to boost sales across the board, and from penetration pricing, which starts with a low price to gain market share. Marketing mix is a broader framework, not a specific pricing strategy.