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A product pricing strategy by which a firm charges the highest initial price
that customers will pay. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment.
Therefore, the skimming strategy gets its name from skimming successive layers of "cream", or customer segments, as prices are lowered over time.
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Firms often use this technique to recover the cost of development.
Skimming is a useful strategy when:
-There are enough prospective customers willing to buy the product at the high price.
-The high price does not attract competitors.
-Lowering price would have only a minor effect on increasing sales volume and reducing unit costs.
-The high price is interpreted as a sign of high quality.
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