Final answer:
The pricing strategy that involves setting a high initial price for a new product is called skimming pricing (option 2). This approach aims to maximize early profits from customers willing to pay a premium before market competition increases.
Step-by-step explanation:
The type of pricing strategy that sets a high price in the introductory phase of the product life cycle is known as skimming pricing. This strategy is utilized when a new product enters the market, particularly one with innovative features or exclusive benefits that justify a premium price.
The goal of skimming pricing is to maximize profits from customers willing to pay more before competing products enter the market and drive down prices. Skimming pricing is a contrast to penetration pricing, where products are introduced with a low entry price to attract a wide customer base quickly.
Other pricing strategies such as cost-plus pricing involves adding a standard markup to the cost of the product, while competitive pricing involves setting prices based on what competitors are charging for similar products.