When new designs are released, they’re usually priced at their highest point. You also see price skimming at some fashion or clothing stores. Unlike cable, a DVD player allows you to choose your own entertainment for the evening, and DVDs have more features and offer a better quality viewing experience than VHS tapes (remember those?).
#SKIM DRESS MOVIE#
Now, if you do a quick search on Amazon, you’ll see that a new DVD player will set you back a mere $33.Ĭertainly, there’s an argument to be made that the price decreased so drastically because of various technological and cultural factors, but take a second to think about paying $1,000 for a DVD player in the late 90s – if you had the money and were a movie buff, it doesn’t seem so crazy.
When DVD players first hit the market in the late 90s, they could cost you up to $1,000. Price skimming is typically employed for new technologies. Once all who are willing to buy at the high price have made their purchase, you “skim” them off the top of the stack, and adjust the price to what the next group of buyers are willing to pay. The name “skimming” comes from the idea of looking at all potential buyers like a stack – those at the top are willing to pay the most, while those at the bottom want to pay the least. As time passes and the product becomes less novel and more accessible, the price steadily declines. Typically, price skimming applies to new, innovative products. Price skimming is when you launch a product with a higher-than-usual markup and then incrementally lower the price over time.
#SKIM DRESS DOWNLOAD#
Want to know how much your business could earn with a price skimming strategy? Download our free sales pricing calculator to see how much revenue and profit you’ll drive, and compare the numbers to eight other pricing models, including penetration pricing, value-based pricing, and premium pricing to choose the best pricing model for your business. Featured Resource: Price Skimming Revenue Calculator Download this Template In this article, we’ll highlight the definition, history, pros, and cons of the price skimming strategy in addition to explaining when it may (or may) not make sense for your business to employ. When used and adjusted effectively, this strategy can maximize the revenue of individual product lines – particularly when they first launch. Price skimming is an approach to pricing your products that capitalizes on novelty, timeliness, exclusivity, and/or innovation. There are dozens of different pricing strategies you can use in your business, and one of the more unique options is the price skimming strategy.
0 kommentar(er)
