STRATEGIC PRICING OF NEW PRODUCTS.

skimming pricing:
one strategy is called skimming pricing,in which the initial product price is set high,and short-term profit are reaped on the new product.the initial market will be small,due in part to the high initial price.this pricing approach often is used for unique products,where there are people who "must have it"whatever the price.as the product gains acceptance and its appeal broadens,the price is lowered gradually.eventually the product is pricing is priced in a range that appeals to several kinds of buyers.

penetration pricing:
An alternative initial pricing strategy is called penetration pricing,in which the initial price is set relatively low.by setting a low price for a new product,management hopes to penetrate a new market deeply,quickly gaining a large market share.this pricing approach often is used for products that are of goods quality,but do not stand out as vastly better than competing products.