Don't Just Set Prices, Use Price Skimming Methods to Increase Sales

Price or price is one of the elements in marketing mix. The price set for a product or service will determine the success of the company's income. Therefore, the process of determining the price of a product or service is one of the important points in marketing.

In addition to affecting the company's income, prices also influence consumer purchasing decisions. That's what makes the company can not be arbitrary in setting prices. It is not surprising that companies set prices according to the characteristics and capabilities of their target consumers.

One pricing strategy that can be applied is price skimming. This article will discuss in full regarding the meaning, advantages, and the right time to use the strategy price skimming, to tips on applying price skimming. Curious what it is price skimming? Make sure you read this article to the end, okay!

What is Price Skimming?

Price skimming is a pricing strategy that is usually used by a company when launching a new product or service.

Strategy price skimming This is done by setting a high price when a new product or service is launched. However, over time, prices will slowly be lowered so that the product or service can reach more consumers and survive in market competition.

Price skimming usually done so that the company can get large profits in a short time to cover the costs of the research carried out. Even so, setting high prices must still be considered within reasonable limits of consumer capabilities. Don't let prices that are too high make consumers reluctant to even glance at the product or service you offer.

Method price skimming can be applied to any type of business, but most brands that apply this strategy are brands that already have a large user base. For example technology companies or electronic goods.

When should you use a Price Skimming strategy?

Strategy price skimming will be more effectively implemented when the company launches a new product or service. Business people can set high prices by highlighting unique selling point of a product or service.

In addition, method price skimming this is also suitable to be applied when a product or service does not yet have too many competitors in the market but does potential market the big one. Therefore, it is important to conduct in-depth research on competitors and potential market since the beginning.

Advantages of Using a Price Skimming Strategy

• Companies get large amounts of profits and fast time
• Products or services get the image of high quality and class
• Stay competitive in the market because over time you can lower your prices
• Strategy price skimming can bring in a lot of exposure from both consumers and the media

Tips for Implementing Price Skimming

• Adjust the price with the quality and benefits of the product offered, don't let the price offered be lame and not comparable to the quality and benefits of the product
• before applying price skimming, make sure you have done in-depth research related potential consumer. Do not let the price set beyond the ability of potential consumer
• Do a thorough competitor analysis if you want to implement a strategy price skimming. If you apply a high price and suddenly a competitor with a low price appears, it can backfire on your product and sales.

Setting an inappropriate strategy has the potential to destroy your business. So make sure you understand the strategy price skimming completely and thoroughly before you try to apply it.