Asked by Pasha Harmidy on Jul 20, 2024
Verified
A firm sets high prices for a product innovation and lowers the price as the product moves into other stages of the product life cycle.The firm is most likely using a pricing strategy of ________.
A) market skimming
B) product positioning
C) market penetration
D) maximum current profit
Market Skimming
A pricing strategy where a firm charges the highest initial price that customers will pay and then lowers it over time as the demand of the first set of customers is satisfied.
Product Innovation
The process of creating new or significantly improved products, enhancing their features, functionality, or design to meet consumer needs or open new markets.
Product Positioning
The process of determining the place a product occupies in consumers' minds relative to competing offerings, focusing on perceptions, impressions, and benefits.
- Recognize the principles and strategies behind market skimming and penetration pricing.
Verified Answer
EF
Emily FisherJul 22, 2024
Final Answer :
A
Explanation :
The firm is using a market skimming pricing strategy, which involves setting a high price for a new or innovative product to maximize profits before competitors enter the market. As the product moves into other stages of the product life cycle and faces competition, the firm lowers the price to maintain market share.
Learning Objectives
- Recognize the principles and strategies behind market skimming and penetration pricing.