NEW-PRODUCT PRICING

STRATEGIES

Sumit Amatya
Ichhya Shrestha
Jabish Gohlyan
 Market-Skimmin Pricing

Market-Penetration Pricing
Market- Skimming Pricing
One of the pricing strategy for products in their introductory
phase.

High initial price is set to skim revenues layer by layer from

the market.

Fewer but higher profit.

Example: Philips 42 LCD TV

Introductory price - Rs. 4,50,000
Current price Rs.1,42,000
 Three conditions necessary for Market-Skimming
Pricing:

Products quality and image must be worth the high

price and enough buyers must be willing to buy it at
that price.
The cost of producing a smaller volume should not be
so high that they cancel the advantage of charging
more.
Competitors should not be able to enter the market
easily and undercut the high price.
2ND STRATEGY
MARKET PENETRATION PRICING
Setting comparatively low price

Hence, attracts the consumers and get large market

share easily

Further, increasing sales revenue further

decreases the price
Conditions:-

Highly price sensitive market

Capable production and distribution channels

Low price must keep out competition