Discussion
Initially charging the high price and then gradually reducing the same after some time period, is called as .............
Answer: A
It is called skimming pricing policy.
Under price skimming, a firm launches a new product at a high price to 'skim the cream' from buyers who value it most and are least sensitive to price, and then lowers the price step by step to reach more price-sensitive segments. It suits innovative products with few competitors at launch, such as new electronic gadgets.
Penetration pricing does the opposite, starting with a low price to win a large market share quickly. Uniform pricing charges the same price to all buyers or in all markets, and unique pricing is not a standard name for this strategy. Only skimming begins high and then reduces the price.
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