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Dear john sir,
I have yet another doubt. Wanted to understand why in order for price skimming to work, the product life cycle should be short?
many thanks as always!
As in if product life cycle is actually short, then in fact price penetration should be used so that as many possible aggregate sales (that can could have been made had the product been charged a higher price first followed by a reduction in price- usual in case of a long life asset) are generated as soon as possible…
I do not know where you are quoting that statement from, but unless it is referring to a specific product for which there is more information then it is not true.
When flat-screen LCD TV’s were first introduced, the producers used a price-skimming policy. However their life-cycle was not short (although it depends how you define ‘short’ 🙂 )
Have you watched my free lectures on this? The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
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