Price skimming is a pricing strategy where a high price is set for a new product or service during its initial launch. The high price is intended to 'skim' off customers willing to pay more to have the product first. It's most effective when the product has a competitive advantage or unique features that justify the higher price, and when there's a segment of customers who value the product highly and are less sensitive to price. Over time, the price is gradually lowered to attract more price-sensitive segments.
Need to improve your product pricing to maximize your profit margin? This Pricing Strategies Toolbox...
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