What are the advantages of prices skimming?

Price strategy is one of the most important ways of competing on the market, especially for the purpose of incurring consumers. One strategy in the sale of goods on the market is to use price skimming, where goods have high initial prices that will drop in a given period of time. Companies can reduce the price of good for many reasons, such as consumers in the market, or when consumers become more sensitive to price. The advantages of price skimming include high profits, creating a sense of exclusivity and market control. Like many business strategies, the use of price skimming should be changed because market shifts are due to consumer demand or other factors.

In some market conditions, the use of price skimming is to raise higher profits with a new or differentiated product. For example, a new technology - whether hardware or software - can allow companies to set high prices due to lack of competition. It is to beIt does not mean that the new product was expensive; This only means that the company can charge a high initial price due to the product itself. In some cases, the company charges these high prices to compensate for specific costs related to production, which in some cases may be relatively high. Either way, it can be a popular strategy of use at certain times.

Another advantage of strategy of prices skimming is to create exclusivity for a particular product or service. In the minds of some consumers, the high price simply means that good or service must have some special reason to control such a rate. The product can be of high quality, has special use or simply to be the only one of its kind on the market. Now this does not necessarily mean that the product actually provides better consumers than any other item. In fact, the item may not be so valuable; The purpose of the PSTRATEGIE rice is simply to create a perception of the value of the consumer's mind, causing an individual item to buy.

Companies can try to control the market using prices. In some cases, the competitor may combine the high price of the product with expensive production costs. Or a company that charges high prices for a certain set of goods is only looking for a specialized market that cannot support a high number of competitors. Either way, the company can use the hiding prices to obtain profits in checking a specific segment on the market.