When Apple introduced its iPhone, it was priced at $599. This allowed Apple to earn the maximum amount of revenue from the various segments of the market. Two months after the introduction, the price had come down to $399. What kind of a pricing did Apple adopt?
A) loss-leader pricing
B) market-penetration pricing
C) market-skimming pricing
D) target-return pricing
E) value pricing

Question

Quizplus · Accepted Answer

Market-skimming pricing involves setting a high price when a product is introduced and then gradually lowering the price over time. This strategy allows a company to maximize its revenue from different market segments, starting with those willing to pay a premium and then reaching more price-sensitive customers as the price decreases. Apple's initial high price for the iPhone followed by a price reduction fits this description.

When Apple Introduced Its IPhone, It Was Priced at $599