The advantage of this strategy is that because of the high price, it can not only recover the cost of developing new products as soon as possible, but also obtain considerable profits, and can quickly adopt the price reduction strategy after competitors develop similar products.
On the one hand, it can limit competitors' participation, on the other hand, it also conforms to consumers' psychology of treating prices from high to low. The disadvantage is that the price is much higher than the value and the profit rate is too high, which will inevitably attract competitors quickly and lead to the loss of the original market.
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After all, the demand for high-priced products is limited. Excessive price is not conducive to market development, increase sales, occupy and stabilize the market, and easily lead to the failure of new product development.
High prices and high profits will lead to the influx of competitors and the rapid emergence of imitations and substitutes, thus forcing the price to drop sharply. At this time, if there are no other effective strategies, the high-priced and high-quality image that enterprises have worked hard to build may be damaged and some consumers will be lost.
The price is much higher than the value, which damages the interests of consumers to a certain extent, easily causes public opposition and consumer resistance, and even is banned as profiteering, causing public relations problems.
Fundamentally speaking, skimming pricing is a pricing strategy to maximize short-term profits. If it is not handled properly, it will affect the long-term development of enterprises. Therefore, in practice, especially in today's increasingly mature consumers and rational purchase behavior, we must adopt this pricing strategy cautiously.
Baidu encyclopedia-skimming pricing strategy