The iPod is a very popular item among people of all ages. The demand is continuing to grow. The iPod's introductory price was around$300, but it is now down to $199.00 for the basic model. As the price has dropped, sales have increased. Which pricing strategy wasused for iPod?

A. Price Elasticity
B. Penetration Pricing
C. Prestige Pricing
D. Bundle Pricing
E. Skimming Pricing

E. Skimming Pricing.

Explanation:

This method or strategy is mainly used in marketing strategy for a new market entry especially because of its uniqueness and also when the value of the commodity to be sold is of a very high qualities and importance.

It is also seen as a product pricing strategy by which a firm charges the highest initial price that customers will pay and then lowers it over time. As the demand of the first customers is satisfied and competition enters the market, the firm lowers the price to attract another, more price sensitive segment of the population. The skimming strategy gets its name from "skimming" successive layers of cream, or customer segments, as prices are lowered over time.

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