Entrepreneurs might consider skimming pricing for several reasons:
Maximize Initial Revenue: By charging a higher price initially, businesses can recoup research and development costs more quickly. Segment the Market: It helps to segment the market by price sensitivity, capturing the consumer surplus from those willing to pay more. Create a Perception of Quality: High initial prices can create a perception of exclusivity and high quality, which can be beneficial for branding. Limited Competition: If the product is innovative or has few competitors, skimming pricing can be an effective way to capitalize on the lack of alternatives.