This PPT slide, part of the 38-slide Pricing Strategy PowerPoint presentation, presents a comparative overview of two pricing strategies: price skimming and penetration pricing. It emphasizes that the choice between these strategies is fundamentally driven by the company's market intent—whether to skim the market or penetrate it.

Price skimming is defined as the practice of introducing a new product or service at a higher price point, which is then gradually reduced over time. This approach is particularly beneficial when a company aims to maximize profit margins by capturing the highest possible prices from early adopters. The slide notes that this strategy can be likened to "riding down the demand curve," suggesting that the company seeks to extract maximum value from consumers willing to pay more initially.

On the other hand, penetration pricing is characterized by launching a product or service at a lower price point than competitors. This strategy aims to quickly gain market share and increase sales volume by appealing to price-sensitive customers. The slide highlights that penetration pricing can effectively disrupt existing market dynamics, allowing a new entrant to establish a foothold rapidly.

Both strategies have distinct implications for revenue generation and market positioning. Companies must carefully evaluate their objectives, market conditions, and customer segments when deciding which approach to adopt. Understanding these nuances can significantly influence a company's pricing decisions and overall market strategy.

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