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New product strategies of market-skimming and market-penetration

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Discuss the two new product strategies of market-skimming and market-penetration.

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The expert examines new product strategies of market-skimming and market-penetration.

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Market Skimming or price skimming involves charging a relatively high price for a short time where a new, innovative or improved product is launched into the market. This is very advantageous to a firm for many reason. It allows the firm to quickly recover sunk costs before competitors step in and introduce substitutes, thus having a lowering effect on price. Also by charging high prices the company can obtain a high-quality image for its products. Some of the disadvantages od market skimming are:
<br>1. It is only effective when the firm is ...

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