Purchase Solution

Pros and Cons of Price Skimming Strategy

Not what you're looking for?

Ask Custom Question

Describe the pros and cons of using a price-skimming strategy versus a price penetration strategy for introducing a new product. Which one is likely to work better for a radical new product like a pure electric car or a solar powered laptop? Why?

Purchase this Solution

Solution Summary

This solution discusses the pros and cons of using a price-skimming strategy versus a price penetration strategy for introducing a new product. It also discusses which strategy is more likely to work for a radical new product like a pure electric car or a solar powered laptop. The explanation is given in 381 words.

Solution Preview

The strategy of price-skimming involves taking advantage of having a new product in the market and initially charging a premium price for it before lowering it at a later date once it has gotten root in the market. On the other hand, a price penetration strategy approaches this from the opposite direction by introducing its product into the market using a low price, with the hope of increasing it at a later date once a dominant market share has been achieved.

The pros of of using a price-skimming strategy over a price-penetration one is that in the mind of the ...

Purchase this Solution


Free BrainMass Quizzes
Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Operations Management

This quiz tests a student's knowledge about Operations Management