Question

The iPod is a very popular item among people of all ages. The demand is continuing to grow. The iPod's introductory price was around$300, but it is now down to $199.00 for the basic model. As the price has dropped, sales have increased. Which pricing strategy wasused for iPod?

A. Price Elasticity
B. Penetration Pricing
C. Prestige Pricing
D. Bundle Pricing
E. Skimming Pricing

Answer 1

E. Skimming Price

Step-by-step explanation:

Skimming price is the pricing system whereby producers and organizations set a high introductory price for a new product in the market which is followed up by gradually lowering the price to attract more customers. It is also know as Skim pricing, where the producers/marketers capitalizes on novelty, timeliness, exclusivity by putting a high introductory price that attracts buyers who has the resources with strong desire to purchase the product there after reducing the price gradually as time goes on.

In this case, the ipod was introduced with a high price of $300 and it gradually reduced to selling price of $199 for the basic model.

Answer 2

E. Skimming Pricing.

Step-by-step explanation:

This method or strategy is mainly used in marketing strategy for a new market entry especially because of its uniqueness and also when the value of the commodity to be sold is of a very high qualities and importance.

It is also seen as a product pricing strategy by which a firm charges the highest initial price that customers will pay and then lowers it over time. As the demand of the first customers is satisfied and competition enters the market, the firm lowers the price to attract another, more price sensitive segment of the population. The skimming strategy gets its name from "skimming" successive layers of cream, or customer segments, as prices are lowered over time.