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Essay heading: Pricing Strategy ...
 
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Issue: Business
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Date added: February 15, 2006
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No of pages / words: 6 / 1453
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This method although simple has two flaws; it takes no account of demand and there is no way of determining if potential customers will purchase the product at the calculated price. Price = Cost of Production + Margin of Profit. [edit] Creaming or skimming Selling a product at a high price, sacrificing high sales to gain a high profit, therefore ‘skimming’ the market...
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Usually employed to reimburse the cost of investment of the original research into the product - commonly used in electronic markets when a new range, such as DVD players, are firstly dispatched into the market at a high price. This strategy is often used to target "early adopters" of a product/service...
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