Merchandising: Four Pricing Strategies and When to Use Them

* Market skimming: Used when you find yourself targeting a niche for which the benefits of a product have a high value, market skimming prices a product at the top of the market against your competitors. Or if there are no competitors for this product, then a skimming strategy “suggests a price at which only a small number of the potential customers for a product will be prepared to buy,” the authors write. This works best when a product is highly unique and not easily reproduced. Further, since this strategy ultimately means that fewer units will be sold, it should be used on products with a high margin.