a) Market skimming and penetration pricing strategies.

Market skimming and penetration pricing are two contrasting strategies employed by businesses when launching new products or entering new markets. These strategies have distinct objectives, methods, and implications for companies aiming to establish a foothold and generate revenue in the marketplace.

Market Skimming Strategy:

Market skimming, also known as price skimming, involves setting a high initial price for a product or service during its introduction phase. The rationale behind this strategy is to target early adopters and customers who are less price-sensitive and willing to pay a premium for innovative or unique offerings. As the demand from this segment is satisfied, the company gradually lowers the price to attract more price-sensitive customers.

Key Characteristics and Advantages:

1. Maximizing Profits: Market skimming allows companies to capture the maximum revenue possible from the market segment willing to pay a premium for the product. This initial high price helps in recovering the costs incurred during product development and launch.

2. Image Building: Setting a high price creates an _____ __________ ___ ______ ___ _____ ________ _______ _______.
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