Pricing new products

Pricing strategy, market entry and price tactics are vital for a new product to succeed

A business can choose between two pricing tactics when launching a new product:

  • Penetration pricing means setting a relatively low price to boost sales. It is often used when a new product is launched, or if the firm’s main objective is growth.
  • Price skimming means setting a relatively high price to boost profits. It is often used by well-known businesses launching new, high quality, premium products.
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