Sometimes, the reverse of this happens. Sometimes, when a company launches a new, novelty product/service range at a high price, the entrance of competitors soon after compels it to lower its prices to survive competition and remain in the market. Most prominent instances of market skimming can be seen in the electronics and computer technology markets because upgrades come up every 6-8 months, pushing previous technology versions towards the maturity stage of the product life cycle. One such prominent example is the Sony PlayStation 3. When launched, it was priced approximately USD 600 but these days, it is available at around USD 300. Laptops and mobile phone handsets are other prominent examples of market skimming. Skimming strategy may be profitable in the following instances:-- The R&D costs involved in an innovative product or technology tends to be very high. Skimming serves to recover such cost before competitors get a chance to barge in on the scene.
Once the cream customer segment is optimally exploited, the product gets established in the market. Also, being the first to introduce such a product to the market, the market skimmer becomes the market leader in that product/service. Skimming often helps the marketer to identify different segments for future discriminatory pricing. High prices mean high dealer markups and following a skimming strategy may be beneficial where third-party distributors and dealers are involved. This creates a win-win situation for both the supplier as well as the dealer. Following are the limitations of this pricing strategy:-- Products for whom a shift in price results in a shift in demand should not be priced under market skimming strategy as higher prices would mean lesser buyers. Discriminatory pricing is subject to many legal implications and as such, a marketer considering using this pricing strategy must make sure he is doing so within the scope of law. Stock clearance may become a problem as the premium paying segment is usually always smaller than the mainstream/lower paying segments. Manufacturers must keep this in mind while planning production volume. A high-priced market entrant is more likely than others to attract competitors sooner. This is due to the fact that competitors would be tempted to earn high margins as well. Subsequent lowering of price may tarnish the premium image of the product and marketer and people may view such a price switch as evidence of lowering of quality standards. As mentioned previously, the price is the sum total of all the costs incurred in producing/procuring the goods/services plus a profit percentage which can be calculated either on the cost price or the selling price. Besides these, a lot of other economic and financial considerations also go into pricing such as consumer's surplus, indifference curve analysis, margins claimed by the channels of distribution, etc. There are, in totality, eighteen types of prices and pricing strategies:-1.
I own an Inspiron 15R, THE ALLROUNDER. The Acer 13.3inch Timeline range are pretty good. I know, a bunch of people will come on a say Acer's suck, but their build quality has improved a lot recently, and they're a pretty good bang for the buck at the 400-500 range! Not really of course, but yea, I have a hard time recommending them due to build quality concerns. I bought an Acer laptop in 2008 at Walmart and that laptop is still going strong. Never had an issue with it. It was the higher end 15.4 inch screen laptop with a great stereo system. Check around for deals. 50 off coupon that I used. 2.3 ghz i5 w/ 6 gb ram and 640gb hd. Aluminum body is great because it doesn't wear as quickly on the palm rests as the painted plastic. The HP dm4 is a good laptop as well. I was considering adding it to the list, but I like the Inspiron 14z/ ThinkPad Edge E420 a bit more. Checking around for deals is good advice with cheap laptops - they really do slash prices, particularly around back-to-school time. Mihir Patkar is a freelance writer on technology and life hacks, who firmly believes chocolate is the answer to any question. You can usually find him saying other such silly things on Twitter. Blackview P10000 Pro Review: Is That a 11000 mAh Battery in Your Pocket…, If YouTube Sucks, Why Is Everyone Still Using It, Which MacBook Is Best for You, MacBook vs. Pro vs.
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