Resultsinfewerbut moreprofitablesales useunderthese

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Unformatted text preview: te Company Sets Prices Based on What Competitors Are Charging Sealed­Bid ? Company Sets Prices Based on What They Think Competitors ? Will Charge 9-14 New-Product Pricing Strategies Market­Skimming Setting a High Price for a New Product to “Skim”Maximum Revenues from the Target Market. Results in Fewer, But More Profitable Sales. • Use Under These Conditions: – Product’s Quality and Image Must Support Its Higher Price. – Costs Can’t be so High that They Cancel the Advantage of Charging More. – Competitors Shouldn’t be Able to Enter Market Easily and Undercut the High Price. 9-15 New-Product Pricing Strategies • Use Under These Conditions: – Market Must be Highly Price­Sensitive so a Low Price Produces More Market Growth. – Production/Distribution Costs Must Fall as Sales Volume Increases. – Must Keep Out Competition & Maintain Its Low Price Position or Benefits May Only be Temporary. Market Pene...
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This note was uploaded on 01/28/2014 for the course BA 331 taught by Professor Kenbaker during the Fall '11 term at University of Tennessee.

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