Price Skimming

Pricing Methods

• • Penetration Pricing

• Price Skimming

  • Competitive Pricing

  • High-Low Pricing

  • Freemium Pricing

  • Value-Based Pricing

  • Cost-Based Pricing

  • Simple Mark-Up

  • Contribution Margin

  • Simple Prime Costs

Price Skimming

A Price Skimming strategy is when companies charge the highest possible price for a new product and then lower the price over time as the product becomes less and less popular or when there is a high level of competition. Skimming is different than high-low pricing in that prices are lowered gradually over time.

Think About It: Price Skimming

• • Why is the Price Skimming strategy typically used with new products only?

  • Why do often need to charge a higher price in the beginning?

• • https://www.bdc.ca/en/articles-tools/marketing-sales-export/marketing/pages/pricing-5-common-strategies.aspx

  • https://blog.hubspot.com/sales/pricing-strategy

  • https://www.investopedia.com/terms/v/valuebasedpricing.asp

  • https://www.pricingbrew.com/insights/value-based-pricing-premium-vs-preference/

  • https://www.seattletimes.com/life/travel/airlines-in-hawaii-price-war-offer-9-inter-island-flights/

  • https://www.webstaurantstore.com/article/129/restaurant-menu-pricing.html