Question

When Prestige Appliances Inc. releases new appliances, it often uses price skimming and sets the initial price at the highest possible price that buyers are willing to pay. What is a reason Prestige Appliances Inc. would choose price skimming instead of penetration pricing?

Answer 1

skimming is more flexible than penetration

Step-by-step explanation:

• When Prestige uses price skimming with highest initial possible price because price skimming is more flexible than penetration pricing
• As Penetrating pricing and price skimming are the marketing strategies that companies typically employ when launching new products or services. Both approaches work for businesses.
• Penetration pricing relies on lower upfront prices to attract customers, while skimming is the use of higher upfront prices to maximize short-term profits from most avid and willing customers.