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  • Pricing Strategy 1

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    Realee Agustin
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    The document compares two pricing strategies: price skimming and penetration pricing. Price skimming involves setting a high initial price that early adopters are willing to pay, then gradually lowering the price over time. Penetration pricing sets the initial price lower than competitors to gain market share in competitive markets, but requires building customer loyalty before eventually raising prices. Both strategies carry risks, with price skimming vulnerable if the market does not tolerate high initial prices, while penetration pricing needs high sales volumes and loyal customers long-term.

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    comparison of two pricing strategies

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    The document compares two pricing strategies: price skimming and penetration pricing. Price skimming involves setting a high initial price that early adopters are willing to pay, then gradually lowering the price over time. Penetration pricing sets the initial price lower than competitors to gain market share in competitive markets, but requires building customer loyalty before eventually raising prices. Both strategies carry risks, with price skimming vulnerable if the market does not tolerate high initial prices, while penetration pricing needs high sales volumes and loyal customers long-term.

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    © All Rights Reserved
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    Download as pdf or txt
    5 views1 page

    Pricing Strategy 1

    Uploaded by

    Realee Agustin
    The document compares two pricing strategies: price skimming and penetration pricing. Price skimming involves setting a high initial price that early adopters are willing to pay, then gradually lowering the price over time. Penetration pricing sets the initial price lower than competitors to gain market share in competitive markets, but requires building customer loyalty before eventually raising prices. Both strategies carry risks, with price skimming vulnerable if the market does not tolerate high initial prices, while penetration pricing needs high sales volumes and loyal customers long-term.

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    © All Rights Reserved
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    of 1

    PERFORMANCE TASK #2

    Pricing Strategy 1 Pricing Strategy 2

    Price skimming Penetration pricing

    If you set your prices as high as the In highly competitive markets, it can
    market will possibly tolerate and then be hard for new companies to get a
    lower them over time, you'll be using foothold. One way some companies
    the price skimming strategy. The goal attempt to push new products is by
    is to skim the top off the market and offering prices that are much lower
    the lower prices to reach everyone than the competition. This is
    else. With the right product it can penetration pricing. While it may get
    work, but you should be very cautious you customers and decent sales
    using it. volume, you'll need a lot of them
    and you'll need them to be very loyal
    to stick around when the price
    increases in the future.

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