Skimming pricing is not suitable for all types of products or markets. It is most effective under the following conditions:
Innovative Products: When introducing a new and innovative product, skimming pricing can be effective because early adopters are often willing to pay a premium. Strong Brand Loyalty: If the brand has a strong following, customers may be less price-sensitive, allowing for higher initial pricing. Inelastic Demand: Products with inelastic demand, where changes in price have little impact on the quantity demanded, can benefit from skimming pricing. High Barriers to Entry: When there are high barriers to entry for competitors, skimming pricing can be maintained longer without the risk of losing market share.