ACCA PM · Chapter 7 · Question 5 of 10
In which of the following circumstances is a price skimming strategy most appropriate?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) The product is new and innovative, and early buyers are prepared to pay a high price
Explanation
Price skimming sets a high initial price to exploit customers who value novelty and are not price-sensitive, recovering development costs quickly. It works best where the product is new and differentiated and barriers to entry protect it for a time. Penetration pricing suits price-sensitive markets and rapid share growth.
More Pricing decisions MCQs
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