Skimming Pricing Skimming Pricing Is the Strategy of Establishing a High Initial Price for a Product with a View to “Skimming the Cream Off the Market” at the Upper End of the Demand Curve. It Is Accompanied by Heavy
Vladimir V. Bulatov. firstname.lastname@example.org
We, Fr 8:30
LECTURE 12. PRODUCT DEVELOPMENT II.
Reading: Ch. 11, 12, addendum sent onto your e-mails.
Three product levels in marketing:
1.Core product: “what the buyer is really buying?” (E.g. Charels Revson [Revlon] recognizes that: “In the factory we make cosmetics; in the store – we sell hope”). Product concept is the idea about benefits, not features.
2.Tangible product – a ready-to-use product that has certain level of quality, features, styling, brand name, and a package.
3.Augment product additionally possesses such benefits as installation, delivery, credit, warranty, after-sale servicing, etc.
Warranty – a statement about manufacturer’s …show more content…
Companies attempt to overcome these barriers in numerous ways to increase the amount of initial sales and shorten the learning (introduction) period of a product.
Strategies to manage a product during its life.
Modifying a product – altering its characteristics to postpone the beginning of a decline stage or to get greater market coverage by new segments.
Modifying a market.
a.Increasing use of a product (e.g. stimulating purchase of a product during stagnation periods [like fertilizers during winter or promotion of Cambell soup during hot periods, when soup consumption usually declines]).
b.Creating new use situations (M&M’s being promoted as a new fill for bakery).
c.Finding new users. (e.g. shifting from industrial consumers to final [if possible] – like Nautilus, which originally made sales only to gyms, but later made offers to individuals).
Repositioning a product.
a.Reacting to competitor’s position.
b.Reaching new market. (e.g. changing the image of liquid yogurt into a soft-drink for health-conscious users).
c.Catching the rising trend. (a trend to consume fat-free products lead to changing images of many products).
d.Changing the value offered: trading up (Toyota Lexus); trading down (cheap airtrips on airplanes