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Pricing Strategies - Skimming, Penetration and Competitive

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1. Summarize in at least 400 words the major points of each type of strategy listed below.
-skimming
-penetration
-competitive

a. In light of continuing high gasoline prices, set the pricing strategy for a fuel additive that boosts automotive mileage.
b. Which strategy should I pursue for fuel being the product?
c. What additional information should I be aware of before deciding on the type of strategy?

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The expert examines pricing strategies for skimming, penetration and competitive.

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1. Summarize in at least 400 words the major points of each type of strategy listed below.
-skimming
-penetration
-competitive

Skimming is a pricing strategy where a target market is identified that will pay more for a product or service than the general population. That audience is marketed to at the higher price. The actual pricing is layered for target markets. Once an audience has been 'sold out' the company will lower the price for the next target audience in the sequence. This skimming off of the markets that will pay the higher price then moving to the next market that will pay a higher price, though not necessarily the highest price moves down until it reaches the mass markets and the normalized price. For example, think giant televisions, Blu-ray players, and other technology.

Penetration is the opposite. The company sets ...

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