Ideally, some business people view pricing as the least important aspect when launching a new product or brand in the market. However, employing the best pricing strategy has a profound effect on the item’s perception and the profit a company or individual will enjoy. If I was to manage a car company I would adopt the skimming strategy whereby I would set the highest price for a particular car brand to attract clients that may be willing to pay for a specific car. In my view, I would target a clientele that is not price-sensitive and is willing to weigh the cost of the car versus its quality against the same features of various substitutes in the market.
As such, when the market demand is satisfied, I will consider lowering the price of the specific car brand with the aim of attracting another group of customers, particularly the price-sensitive clients. Skimming will be the most effective strategy as it will attract a pool of buyers that want to spend money to buy high-quality cars that will, in turn, result in high profits to the company. Initially, the high price tag will counter other competitors, as they may not be able to attract high-value clients. My company will be able to attract more customers, since a high price is interpreted as a sign of quality.
Skimming strategy works in car companies that often launch different brands of vehicles. Car sellers flourish since governments safeguard copyrights and patents for new products launched in the market and value brand uniqueness. Skimming technique will not only increase profits but also maintain customer loyalty by producing high-quality products. Therefore, enhancing a positive image in the long-term.