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Definition of 'Price Skimming'
A product pricing strategy by which a firm charges the highest initial price that customers will pay. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment.
Therefore, the skimming strategy gets its name from skimming successive layers of "cream," or customer segments, as prices are lowered over time.
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Investopedia explains 'Price Skimming'
Firms often use this technique to recover the cost of development.
Skimming is a useful strategy when:
-There are enough prospective customers willing to buy the product at the high price.
-The high price does not attract competitors.
-Lowering the price would have only a minor effect on increasing sales volume and reducing unit costs.
-The high price is interpreted as a sign of high quality.
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Search results for 'Price Skimming'
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http://www.investopedia.com/articles/stocks/11/risks-every-stock-faces.asp
... someone may find a way to make a similar product at a cheaper price. ... Whether it's
the company's management skimming money out of the company, improperly stated ...
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http://www.investopedia.com/articles/pf/07/foreclosure_scam.asp
... a deficiency judgment, which represents the difference between the sold price of
the ... Equity Skimming In this scenario, a person who calls himself a buyer stops ...
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http://www.investopedia.com/articles/forex/11/beginners-guide-forex-scalping.asp
... Scalping, at least in trading, is a term used to denote the "skimming" of small ... the
bottom right of your chart, then look to sell each time the price gets to a ...
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http://www.investopedia.com/articles/pf/05/051805.asp
... Skimming generally occurs when your credit card is used to make a purchase, and ... such
as the promise of an extravagant vacation at an attractive price if only ...
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http://stocks.investopedia.com/stock-analysis/2009/Dont-Ride-Coach-Just-Yet-COH-M-SKS-JWN-TJX1022.aspx
... collection, a budget-friendly concept consisting of products with price points ranging ...
Skimming Poppy's offerings, the products appear tacky, and the edgy look ...
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