Question

Lush Cosmetics Corp., a U.S.-based firm, has recently started exporting cosmetics to India. Lush has introduced a new range of mineral-based makeup products for the first time in the Indian market. As Lush has no competitors in this segment of the Indian cosmetics market, it has set a very high price for its products in order to reach the premium, price-insensitive segment of the market.

This is an example of _____.

A. a penetration pricing policy
B. a psychological pricing policy
C. bundling
D. price skimming
E. cost-based pricing policy

Answer 1

Answer: (D) Price skimming

Step-by-step explanation:

The price skimming is one of the type of pricing strategy where the seller or the marketer firstly set the price of the product and the services very high at the initial stage. Then, the marketer lower the price of the product over the time.

In this type of strategy, when the customers are get satisfied with the product then the organization lower the product price for attracting the others products then it is known as the price-sensitive segment.

Therefore, the given situation is the example of the price skimming.