Company A uses a pricing approach where the initial price for a product is set high and then lowered, and Company B uses an approach where initial prices are set low in an effort to gain market share. What terms best describe these practices? $\begin{array} { | l | l | l | }
\hline & \text { Company A } & \text { Company B } \
\hline 1 & \text { Predatory } & \text { Skimming } \
\hline 2 & \text { Penetration } & \text { Predatory } \
\hline 3 & \text { Skimming } & \text { Penetration } \
\hline 4 & \text { Skimming } & \text { Predatory } \
\hline 5 & \text { Predatory } & \text { Penetration } \
\hline
\end{array}$
A)1
B)2
C)3
D)4
E)5

Question

Company A uses a pricing approach where the initial price for a product is set high and then lowered, and Company B uses an approach where initial prices are set low in an effort to gain market share. What terms best describe these practices? $\begin{array} { | l | l | l | } 
\hline & \text { Company A } & \text { Company B } \
\hline 1 & \text { Predatory } & \text { Skimming } \
\hline 2 & \text { Penetration } & \text { Predatory } \
\hline 3 & \text { Skimming } & \text { Penetration } \
\hline 4 & \text { Skimming } & \text { Predatory } \
\hline 5 & \text { Predatory } & \text { Penetration } \
\hline
\end{array}$
A)1
B)2
C)3
D)4
E)5

Quizplus · Accepted Answer

Company A's approach is skimming because they start with a high initial price and then lower it, hoping to make a profit from early adopters who are willing to pay a premium for having the latest product. Company B's approach is penetration because they start with a low initial price to attract customers and gain market share. Neither approach is necessarily predatory, which involves using aggressive tactics to gain market share at the expense of competitors.

Company a Uses a Pricing Approach Where the Initial Price