Review:
Skimming Pricing Strategy
overall review score: 4.2
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score is between 0 and 5
Skimming pricing strategy is a pricing tactic where a company sets a high initial price for a product or service and then gradually lowers it over time.
Key Features
- High initial price
- Gradual price reduction over time
- Used to target early adopters and maximize profit potential
Pros
- Maximizes profit potential by targeting early adopters willing to pay a premium price
- Can help recoup development costs quickly for new products or services
Cons
- May alienate price-sensitive customers who are unwilling to pay the initial high price
- Competitors may undercut prices once they enter the market