Your book identifies two New Product Pricing Strategies – Market Skimming and Market Penetration Pricing
New Product Pricing Strategies
Let’s assume you are introducing a new product into the market. The product is a ‘hydration test’. It is a tablet the size of an M&M or asprin. You put the tablet in your mouth for a minute, if the tablet turns red then you are dehydrated and need water. If the tablet is blue, you’re fully hydrated. The tablets come in a roll like Lifesavers.
Your book identifies two New Product Pricing Strategies – Market Skimming and Market Penetration Pricing. Pick one strategy that you think is appropriate for this product and defend your answer. FIRST, you must consider the target market for the product and the target’s perception of value for this product. Consider the target market and their corresponding elasticity relative to different price points.