BA 2500 MOD 4 ASSN 1

Magic and Divination

This is a new magic mystical project made from witches and wizards. The project is witchy and wonderful and has the enchanting community which brings the project into life. Since this is a new and a perfect project, the best pricing strategy that can be used is skimming pricing. That will ensure the company have more profits to cover the production cost.

Characteristics

Characteristics

Definition

Penetration pricing

Penetration pricing

Refers to a pricing technique where a new product is introduced to the market at a low price to make market penetraation easier.

Skimming pricing

Skimming pricing

Refers to a strategy where high markups are charged for a new product hence high price.

Objective

Aims to penetrate the market easily

Aims to skim the market via the introduction of new products.

Profit margins

Achieves low-profit margins.

achieves high-profit margin.

Example

a new telecommunication Company provides one-month free internet services.

An electronic company introduces new product which has improved technology at a high price.