Show the process of pricing during introduction, Managerial Accounting

Assignment Help:

Q. Show the process of Pricing during introduction?

Pricing during introduction: in pricing a new product generally two kinds of strategies are suggested viz.

a) Skimming price policy: this is pricing policy in which a vary high price is fixed in the beginning that skims the demand from the outside. By this policy the company earns a huge amount of profit in the initial marketing of the product. When the competitors enter the fields the price are allowed to fall gradually. The company is able to recover the investment made in the product in a short period. This type of policy is used in case of products where the company expects heavy competition after some time and wants to take the cream before it happens.

b) Penetration price policy: in contrast with skimming price policy the penetration price policy involves a reverse strategy. It requires fixing a lower initial price designed to penetrate the market as quickly as possible. This policy is intended to maximize the profit in the long run therefore the firms pursuing the penetration price policy set a low price of the product in the initial stage.


Related Discussions:- Show the process of pricing during introduction

Show process of pricing under decline stage, Q. Show process of Pricing und...

Q. Show process of Pricing under decline stage? In this stage the producer should follow the pricing strategy which may fetch revenue not less than its cost of production. If h

Calculate the net increase or decrease in monthly profit, Painter Ltd, whic...

Painter Ltd, which manufactures and sells a single product, is currently producing and selling 102,000 units per month, which represents 85% of its full capacity. Total monthly cos

Marketing decisions, Marketing refers to the promotion of products, ...

Marketing refers to the promotion of products, especially advertising and branding. But marketing includes product management, pricing, prom

Types of factoring, Types of Factoring The factoring facilities can be ...

Types of Factoring The factoring facilities can be largely categorized in four groups that are as follows: 1)   Full service non-recourse (old line) 2)   Full service rec

Constraints, Constraints 1) A constraint of the type ≤ (≥) can be conve...

Constraints 1) A constraint of the type ≤ (≥) can be converted to an equation by adding a slack variable to (subtracting a surplus variable form) the left side of the constrain

Cost-volume relationship utilization, Cost-volume relationship utilization ...

Cost-volume relationship utilization Cost-volume-profit study is an estimating concept which can be employed in a variety of pricing circumstances. You can employ the cost-volu

Explain cost flow in activity based costing, Normal 0 false f...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Time series analysis, how do i use least squares method to solve semi avera...

how do i use least squares method to solve semi average problem?

Marginal costing technique, how company apply marginal costing techniques s...

how company apply marginal costing techniques show with an example

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