Global marketing - Research Paper Example & Carl (2010) the skimming pricing strategy is most effective in market conditions where the customers are more than willing to pay above average market price for goods and services. They also note that this strategy is effective for copyrighted, patented or trademarked products and innovative technological breakthrough. Apple has effectively employed the skimming strategy by introducing innovative technological products at a relatively high price (Smith, 2011). Penetration pricing strategy involves charging a lower price for a product relative to competitors’ price level, with the main objective serving the mass market and increasing the firm’s market share (Smith, 2011). The rationale for charging low price is that it would increase market share and economies of scale thus significantly lowering the overall production costs. In contrast to the skimming pricing strategy, charging lower prices implies that the firm relies on higher sales volume to attain break-even because of the low profits per unit of production (Tellis, 1986).
