The benefits of the strategy Skimming pricing strategy

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The benefits of the Skimming Strategy strategy include:

Maximize Initial Profits: Price Skimming allows businesses to get high profits from customers willing to pay the highest prices. According to a report by McKinsey & Company, in 2017, this strategy helped a leading technology company increase revenue from US$100 million to US$500 million in just 18 months.
The skimming pricing strategy brings many benefits to businesses
The skimming pricing strategy brings many benefits to businesses

Build a premium image and value: Applying a skimming price strategy allows a business to build a premium image for a product or service that makes an impression and creates exceptional value. For example, the Apple company used this strategy for their first iPhone in 2007, when it set a higher starting price than competing products. This helped create a premium and unique product feel, and the iPhone became one of the most successful products in the history China WhatsApp Number List of technology.
Focus on high-priced customers: Skimming allows businesses to focus on customers who are willing to pay the highest price. According to a Nielsen study, in 2016, high-paying customers were often twice as profitable as low-paying customers. Therefore, this strategy helps businesses increase profits and focus on customer groups that bring great economic value.
Limitations of the strategy Skimming pricing strategy
The application of the skimming price strategy also has disadvantages and risks of failure such as:



Generate high customer churn: Customers may feel displeased when they see someone else buying a product for less than they paid for. This can lead to a loss of customer trust and motivation to buy from the business.
Considered unethical product pricing: Customers may feel that businesses are taking advantage of their eagerness to unethically raise prices. This can affect the image and reputation of the business.
Attracting Competitors Offering Similar Products at Lower Prices: One disadvantage of skimming is that it can attract competitors to offer similar products at lower prices. This can cause price competition and affect the maintenance of market share and profits of the business.