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What is skimming pricing objectives?

Skimming pricing objectives involve setting high initial prices for new products to maximize revenue from customers willing to pay a premium before lowering prices over time. This strategy aims to recover development costs quickly, segment the market based on price sensitivity, and establish a high-quality or luxury perception of the product. Skimming is effective for innovative or unique products with limited initial competition, allowing businesses to capitalize on market segments with higher willingness to pay before broadening the product’s accessibility with price reductions as competition increases.

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