Market Skimming Concept

The English expression market skimming designates a price strategy based on the maintenance of high prices as a way to position the company or a product at the top of the market. With a high prices level, only small market clusters with bigger purchase power, can have access. On the other hand, they will only purchase the product those consumers who value it the most. So, with this kind of strategy, what is lost in market share is recovered in sales margins.

A strategy with these characteristics is usually used in products with a high level of differentiation and to which the consumers recognize an intrinsic high value. Can also be used only in the products’ release phase as a way to achieve a distinctive positioning and after gradually reduce the price as way to conquer a market share.

 

 

Translated from Portuguese by Susana Saraiva, Portuguese-English and English-Portuguese translation specialist. Contact: spams@sapo.pt.