Pricing Strategy
Method for setting prices to achieve business objectives.
Formula
Price (Cost-Plus) = Unit Cost + Markup %
Real World
Apple used price skimming when launching the iPhone 15 Pro at £1,199, targeting early adopters willing to pay a premium before gradually reducing prices as competitors entered the premium smartphone segment.
Exam Focus
Match the pricing strategy to the business context — stating skimming suits innovative products with inelastic demand earns application marks.
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