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Products would not fit the pricing model of market skimming

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1. Many companies engage in "market skimming," offering new products at whatever price the market will bear, then over time decreasing the price in order to gain the maximum profit from each market segment. List at least two products that would not fit this pricing model. Discuss why they do not fit this model?

2. When is a brand more than just a brand? Cite an example of when you or someone you know purchased something based primarily on the brand? Was it because of some perceived quality difference, or was it based on the expectation of how others would see or treat you?

3. Choose any product and discuss it with respect to the five levels of the product.

? The core benefit
? Basic product
? Expected product
? Augment product
? Potential product

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Solution Summary

The products that would not fit the pricing model of market skimming is examined.

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1. Many companies engage in "market skimming," offering new products at whatever price the market will bear, then over time decreasing the price in order to gain the maximum profit from each market segment. List at least two products that would not fit this pricing model. Discuss why they do not fit this model?

The two products which may not fit in this pricing model are Salt and Soaps. The reason why this model does not fit into this category is because both salts and soaps are fast moving consumer goods and if there are high prices kept for these products while introducing the product then the acceptability of these products will be low as consumers will be price sensitive in such a category until and unless the soaps or salt is differentiated in some way or other. ...

Solution provided by:
Himanshu Mahobia, MBA
Education
  • BCom, M.D.S University, Ajmer
  • MBA, M.D.S University, Ajmer
  • PhD, Suresh Gyan Vihar University, Jaipur
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