Friday, October 13, 2006

Skimming Price Strategy

Skimming price strategy is operated by first placing the product at the premium end ( i.e. high price) targeted at status conscious audience. After that segment is exhausted the price is progressively reduced to target the middle class and finally the lower class.A drawback of this strategy is that the brand value may be destroyed because what is offered to the lower and middle class high class people would not touch. But the advantage for the company is that profit and revenue are maximized.

" While skimming, tread with caution".

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