It shows the price reduction of 9 different models of Samsung phones over 41 months since their launch. This line graph is a classic example of price skimming. Therefore, skimming is a commonly used pricing strategy. As soon as a product launches, competitors introduce products with similar features. Car brands and tech-related products are highly competitive sectors. Unlike prestige pricing, in skimming, the price is reduced a few months after its launch. In both strategies, products are launched with a high price tag. The price skimming strategy is similar to prestige pricing. In one of our earlier articles, we explored prestige pricing, a strategy in which a premium price is set for a product to give an impression of high quality and desirability. If your business goal aims to achieve any of the following or a combination, then a penetration pricing strategy may work for you. Such products are sensitive to price variation and have high mass appeal and aspiration value.

Penetration pricing suits products that are price-elastic. The ultimate goal of such brands is to develop long-term loyalty among customers. After capturing a sizeable market share, the price is then steadily increased. By offering the lowest price in its category, the product intents to sell maximum volume. ‘Penetration Pricing’ is a short-term marketing strategy, that brands try in the initial phase to increase market share. Industry Examples of Penetration Pricing Strategy.

Penetration pricing is