Question

Top-Flight is a manufacturer of golf balls which are described as "perfectly good, inexpensive and suitable for average players. Top-Flite introduced its 'Strata golf balls with a new dimple design and more solid core for better flight with metal clubs. The price of this golf balls were three times that of regular balls. The Sports shops could not keep them in stock. What is the pricing strategy implemented by Top-Flite, and why do you think the company choose this strategy?

Answer 1

Top-Flite implemented a skimming pricing strategy for their 'Strata' golf balls, which are positioned as a premium product with improved features. This strategy aims to generate higher profits initially before gradually reducing the price.

Step-by-step explanation:

The pricing strategy implemented by Top-Flite is a skimming pricing strategy. This strategy involves setting a high initial price for a product and then gradually lowering the price over time as demand decreases and competitors enter the market.

Top-Flite chose this strategy because they introduced a new and improved product, the 'Strata' golf balls, with a new dimple design and more solid core. By setting a higher price for these golf balls, Top-Flite positioned them as a premium product that offers better flight with metal clubs. This strategy helps create the perception of higher value and quality, which could justify the higher price.