Under which pricing strategy higher initial prices are fixed?

Question

‘Novel Stores’ is a chain of grocery stores that has built its reputation on customer satisfaction. It is known for its high-quality products, including a wide variety of bakery, dairy products and ready-to-cook meal kits, etc. catering to diverse customer needs. The store regularly takes feedback from the customers and stocks items accordingly.
The store is popular among the customers for its attractive schemes such as ‘buy one get one free’ offers and weekly discounts, etc. which are advertised on its website.
Once the goods are manufactured, packaged, branded and promoted, ‘Novel Stores’ ensures that they are made available to customers at the right place, in the right quantity and at the right time. Customers can place orders online and choose to get them delivered at their home or pick them up from the store at a selected time. As a result, the revenues of ‘Novel Stores’ are growing every year and profits are increasing.
Identify and explain the elements of marketing mix highlighted in the above case.

Answer 1

Pricing Strategy with Higher Initial Prices:
Higher initial prices are fixed under the Skimming Pricing Strategy.

Explanation:
In the skimming pricing strategy, a company sets a high price when a new product is launched. This strategy is used to “skim” the market by targeting customers who are willing to pay more for a new or innovative product.

The price is gradually reduced over time as competition increases or demand from early buyers decreases.

Example:
New smartphones, electronic gadgets, and technology products are often introduced at high prices and later sold at lower prices.

Conclusion:
The pricing strategy in which higher initial prices are fixed is known as Skimming Pricing Strategy.

Under which pricing strategy higher initial prices are fixed?

Show Hint

Solution and Explanation

Top Questions on Marketing Management

Questions Asked in PSEB XII exam