market skimming pricing
Definition
Approach under which a producer sets a high price for a new high-end product (such as an expensive perfume) or a uniquely differentiated technical product (such as one-of-a-kind software or a very advanced computer). Its objective is to 'skim' maximum revenue from the market before substitutes products appear. After that is accomplished, the producer can lower the price drastically to capture the low-end buyers and to thwart the copycat competitors.
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