Explain skimming as a pricing strategy with examples.

Explain skimming as a pricing strategy with examples.

Skimming is a pricing strategy adopted by firms under which goods are sold at high prices to capture their market value. Example electronic goods like LCD TV . The purpose of such strategy is to mint higher profits within the short run period in order to recover the costs incurred in product researching ,manufacturing, marketing etc as such costs associated with the product are high. However this strategy carries with it the risk of acceptance of the product in the market as other competitors may tend to lower their price range of the same product thereby forfeiting a large part of the market share.