Companies bringing out a new product can choose between three broad strategies: a skimming price, penetration pricing, and trial pricing. Distinguish among the three
What will be an ideal response?
A skimming price is used to skim revenues from the market by entering with high initial prices. The product's quality and image must support its higher price, and enough buyers must want the product at that price. Competitors should not be able to enter the market easily and undercut the high price. Penetration pricing is the opposite of a skimming price. It is used to penetrate the market quickly and deeply to attract a large number of buyers and win a large market share by setting a low price upon entering the market. The low price should help keep out competition and be maintained over time. Trial pricing also offers a low price for a new product, but unlike penetration pricing it only offers the low price for a limited time.
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A) retained by the customer as proof of a deposit transaction B) the same as a signature card C) used by the bank as an alternative to a remittance advice D) given by the customer to the bank as a proof of deposit
Which of the following statements is NOT correct? Under conditions of perfect capital markets:
A) investors do not pay taxes, but firms do. B) firms do not pay taxes, but investors do. C) capital structure matters because it can change the value of the firm. D) capital structure does not matter because it cannot change the value of the firm.
Information asymmetry is chief among violations of which of the assumptions of an ideal capital market?
a. Capital Markets are frictionless b. Homogeneous expectations c. Atomistic competition d. The firm has a fixed investment program e. Once chosen, the firm's financing is fixed
Which of the following has introduced a tool known as Consumer Alerts to inform readers when a review is likely to be fraudulent?
A) Yelp B) TripAdvisor C) Angie's List D) TripExpert