Final answer:
Gambrell Designs' marketing department would likely employ a skimming pricing strategy for the Automatic Dog Walker if they expect a short product life cycle, aiming to maximize short-term revenue. The product life cycle stages greatly influence pricing strategies, and aligning the pricing strategy with marketing goals is crucial for the product's success.
Step-by-step explanation:
If Gambrell Designs believes its new product, the Automatic Dog Walker, will have a short product life cycle, the marketing department is likely to be focused on recouping the investment quickly and making a substantial profit in a short period. The primary pricing objective in this scenario would typically be skimming pricing, which means setting a high initial price to maximize the revenues layer by layer from different segments of the market.
Usually, this strategy is employed for innovative products or when there's a unique value proposition that justifies the high cost. On the other hand, if the goal was rapid market penetration, the company might opt for penetration pricing, setting a low initial price to quickly attract a large number of customers and gain a significant market share before competitors enter the field.
The product life cycle is an important concept in marketing that describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline. During the introduction phase, high-cost strategies like skimming might be more viable, especially if the product is perceived as innovative or has a novel value proposition. Penetration pricing is typically more common when long-term market dominance is the goal, and the company is willing to sacrifice initial high profits for longer-term market share.
Gambrell Designs must align its pricing strategy with its overall marketing and corporate objectives. This alignment will ensure that the price point chosen will not only appeal to the target consumer segment but also achieve the company's financial targets within the envisaged product life cycle timeframe.