
This is because the newly launched products usually have no competition or the brand is well-established in the minds of its users in order to warrant a lot of potential buyers for it.Īpple’s pricing strategy on its smartphone lineup follows the price skimming strategy to a tee. For example, tech companies usually use price skimming. Price skimming suits well for certain industries more than the others.

Price skimming is used by businesses in case they meet either or all of the following situations – In simple terms, the business charges the highest price when the offering is launched and is new in the market, and then reduces the price over time.

Price skimming aka skim pricing is a pricing strategy where businesses tend to markup the initial price of the product to a much higher rate and slowly decrease it as time goes on.
