Which pricing method sets the price of the product on what the customer is willing to pay quizlet?

1. Skimming pricing involves setting the highest initial price that customers really desiring the product are willing to pay when introducing a new product.

2. These customers:
- Are not very price sensitive.
- Weigh the new product's price, and quality against the same characteristics of substitutes.
- As consumer demand is satisfied, the firm lowers the price to attract another, more price-sensitive segment.
- Skimming pricing gets its name from skimming successive layers of "cream," or customer segments, as prices are lowered in a series of steps.

3. Skimming pricing is an effective strategy when:
- Enough prospective customers are willing to buy the product at the high initial price to make these sales profitable.
- The high initial price will not attract competitors.
- Lowering price has only a minor effect on increasing the sales volume and reducing the unit costs.
- Customers interpret the high price as signifying high quality.

4. These four conditions are most likely to exist when:
- Patents or copyrights protect the new product.
- Consumers understand and value the product's uniqueness.

Which pricing method sets the price of the product and what the customer is willing to pay?

What is a skimming price quizlet?

What factors are used to set a price when you use value based pricing quizlet?

Which term is the price the business charges a customer for a product?