Explain skimming pricing, Managerial Accounting

Assignment Help:

Explain Skimming pricing

It is one of the most commonly discussed pricing method is the skimming pricing. This pricing method to the firm's desires to skim the market by selling at a premium price.

This pricing method delivers results in the following situations

When target market associates quality of the product with its price, and high price is perceived to mean high quality of the product.

When the customer is aerie and is willing to buy the product at a higher price just to be an opinion leader.

When the product is perceived as enhancing the customer's status in society.

When competition is non-existent or the threat from potential competition exists in the industry because of low entry and exist barriers.

When the profit represents significant technology breakthroughs and is perceived as a high technology product.

In adopting the skimming pricing the firm's objective is to achieve an early breakeven point and to maximize profits in a shorter tier span or seek profits from a niche.

 


Related Discussions:- Explain skimming pricing

Disadvantages of participatory budgets , Disadvantages of participatory bud...

Disadvantages of participatory budgets   They consume more time and therefore are more expensive The advantage of management participation may be negated by failure t

Chapter 3, Cretin Enterprises uses a predetermined overhead rate of $21.40 ...

Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $171,200 of total manufact

Provision for contingencies, After determining the amount of working capita...

After determining the amount of working capital as in above, a specific amount say 5 percent or 10 percent may be added to cover contingencies. This is to be noted that facts depen

What are the classification and computation of variances, Classification an...

Classification and computation of variances The computation and analysis of variances is the main aim of standard costing. The variance is the difference among the standard pe

What are the difficulties in cost reduction, Difficulties in cost reduction...

Difficulties in cost reduction 1) Resistance by employees to pressure to reduce cost usually because the nature and purpose of the campaign has not been properly explained to t

Include specific technologies to support your point, Winner says, "It is cl...

Winner says, "It is clear that in decades to come a great many things like telephone answer machines and automatic bank tellers will become, in effect, members of our society." Mor

Duffy tol and stamping, What are the objectives of excellence teams and min...

What are the objectives of excellence teams and minicompanies? Did the companies achieve these objectives?estion #Minimum 100 words accepted#

State the opportunity cost, State the Opportunity cost The net selling ...

State the Opportunity cost The net selling price, rental value or transfer value which could be obtained at a point in time if a particular asset or group of the assets were to

What is zero bases budgeting, What is Zero bases budgeting (ZBB) ...

What is Zero bases budgeting (ZBB) Meaning and definition Zero base budgeting is a management tool for providing a sys tem for a careful consideration of actual in

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd