What is the main characteristic of skimming market pricing?

The main characteristic of skimming market pricing is the strategy of establishing high initial prices for unique products. This approach is often used by companies that introduce innovative or distinct products to the market, targeting consumers who are willing to pay a premium for early access to new features or benefits. By starting with a high price, businesses can maximize revenues from early adopters who value exclusivity and are less price-sensitive.

As time goes on and competition potentially increases, the company may gradually lower prices to attract more price-sensitive customers. This technique leverages the perceived uniqueness and value of the product at launch, capitalizing on the demand from consumers who want to be among the first to own it. This pricing strategy is particularly effective in industries like technology, where pioneering products often enjoy high margins before more mainstream competitors enter the market with similar offerings.