.

Price skimming strategy

The practice of ‘price skimming’ involves charging a relatively high price for a short time where

a new, innovative, or much-improved product is launched onto a market. The objective with

skimming is to “skim” off customers who are willing to pay more for having the product sooner;

prices are lowered later when demand from the “early adopters” falls.

Market penetration pricing is a pricing strategy that sets a low initial price for a product. The

goal is to quickly attract new customers based on the low cost. The strategy is most effective for

increasing market share and sales volume while discouraging competition.

Penetration pricing is most appropriate when demand for a new product is expected to be high

and the product can be easily copied by many competitors. Setting the price low initially

discourages competition from entering the market. It is also an appropriate strategy to use when

you intend to become the market standard, marginalizing the competition. Before implementing

a penetration pricing strategy, a supplier should be sure that it has sufficient production and

distribution in place to meet the demand.

For a new firm i would say use penetration strategy . offer low grow fast and then adopt the

market price as the companies currently competing .but if u remain to focus on low cost u risk

losing ur place in the market because ppl will become suspect of ur services ..(cheap so it cant

be good) FIX UP THAT HIGHLIGHTED AREA