When a new product appeals to consumers who are willing to pay a premium price to have an innovation first, marketers should use a ______ strategy.

• A. Penetration pricing
• B. Economy pricing
• C. Price skimming
• D. Bundle pricing

Answer: (C)

Price skimming is used when a new product appeals to consumers who want to be first and are willing to pay a premium. The idea is to set a high initial price to capture the maximum value from early adopters, help recover development costs, and create a sense of exclusivity and cutting-edge appeal. As this initial demand tapers off, the price is gradually lowered to attract more price-sensitive customers, allowing the product to reach a broader market while still protecting margins. This approach matches the scenario where the emphasis is on the prestige of being first and on capturing high willingness to pay, rather than trying to minimize price to gain market share, compete on low cost, or bundle options.