Mkt 571 Week 4 - Price And Channel Strategy

Price and Channel StrategyChristina ForresterMKT/571 September 30, 2017Dr. John HamiltonPricing and Channel StrategiesSkimming Pricing StrategyPrice skimming is a dynamic pricing strategy. The objective of this strategy is to earn an initial high profit to offset development cost. This strategy will be used in channels where initial demand is high and there are sufficient buyers with ability to pay premium prices. The strategy will work well where there are sufficient barriers to keep competitors out for the duration of the strategy. The company will employ this strategy for patent protected products. Apart from earning high revenue, this strategy will help the company create the perception of a high quality and exclusive product in the minds of consumers. The market will be segmented by brand differentiation in order to generate high short-term profits and position the product as exclusive (Amstrong & Kotler, 2005).Penetration PricingPenetration price is static pricing strategy, which is very suitable for market entry. For products, entering the market with an aim of capturing the mass market the business will offer an initial low price to get a share of mass-market. The