What is the term for fixing high price for new product ?

Options

A. Decoy Pricing
B. Skimming
C. Freemium
D. Absorption Pricing

Answer

B

Explanation

(b) When goods are sold at higher prices so that fewer sales are needed to break even, it is known as creaming or skimming . Selling a product at a high price , sacrificing high sales to gain a high profit is therefore 'skimming' the market . Skimming is usually employed to reimburse the cost of investment of the original research into the product : commonly used in electronic markets when a new range , such as DVD players, are firstly dispatched into the market at a high price . This strategy is often used to target early adopters " of a product or service.