If Norelco introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as
A) penetration pricing.
B) psychological pricing.
C) price lining.
D) price skimming.
E) odd-even pricing.

Question

Quizplus · Accepted Answer

The initial pricing strategy used by Norelco is called price skimming, where the firm sets a high price initially to capture the early adopters and recovers the cost of development and marketing. Then the price is gradually reduced to attract more price-sensitive customers.

If Norelco Introduced a New Electric Razor That Sonically Removes