In the market development period, innovative products are usually priced by skimming pricing strategy and market penetration pricing strategy.

Market skimming pricing method

At the beginning of the new product's listing, the price of the new product is set at a higher level, so as to obtain a larger profit in a short time and recover the investment as soon as possible, just like skimming cream from milk and taking its essence, so it is called "skimming pricing". Generally speaking, for brand-new products, products protected by patents, products with low elasticity of demand and price, popular products, products with uncertain future market situation, etc. , you can use skimming pricing strategy. For example, when the ballpoint pen was invented in 1945, it was a brand-new product with a cost of 0.50 US dollars. However, the inventor used advertising and novelty to sell it for 20 US dollars, which still caused a snap.

Skimming pricing is a pricing strategy to maximize short-term profits. If it is not handled properly, it will affect the long-term development of enterprises. Therefore, in practice, especially in today's increasingly mature consumers and rational purchase behavior, we must adopt this pricing strategy cautiously.

Market penetration pricing method

Set the product price below the expected price at the beginning of the new product listing to attract a large number of buyers. In this way, the market can be opened quickly, and higher sales volume and market share can be obtained, and then significant cost-economic benefits can be generated, so that costs and prices can be continuously reduced. Penetration price does not mean absolute cheapness, but relative value is relatively low.

The preconditions for using osmotic pricing are: the demand price elasticity of new products is large; The new product has economies of scale. On the basis of these two conditions, Japanese seiko watch adopted penetration pricing strategy to compete with Swiss watches at low prices in the international market, and finally captured most of the market share of Swiss watches.

When using the above two pricing methods, the following factors should generally be considered:

1. The ability of the enterprise to produce this product. Enterprises with large production capacity and able to introduce a large number of products to the market should adopt infiltration method to make small profits but quick turnover; On the contrary, enterprises whose production capacity is difficult to expand and meet the market demand for a while should adopt skimming pricing method.

2. Whether the new technology has been made public and is easy to realize. If it is open and easy to implement, in order to effectively exclude competitors, it is advisable to adopt penetration pricing strategy; If the new technology has not been made public, enterprises can adopt skimming pricing method.

3. The size of demand elasticity. If the demand elasticity of products is large, it is easy to increase sales at low prices, and the total profit will increase accordingly; If the elasticity of product demand is small, skimming pricing method can improve the profit of unit product, thus expanding the total profit accordingly.