ABSTRACT
This chapter examines the factors influencing the prices for new products and to suggest techniques for setting these prices. The price finally set that will yield the largest sales revenue reflects the uniqueness of the product and price/performance characteristics relative to competitive products. The landmark book in pricing is still the definitive Pricing in Big Business , published in 1958, in which the authors explored the pricing strategies of a number of large corporations. Skimming pricing , as its name implies, involves introducing a product at at a relatively high price. Penetration pricing , the reverse of skimming pricing, uses low prices at the outset. The highest feasible price is, as mentioned earlier, related to the elasticity of demand for the product, which in turn would be a function of the uniqueness and degree of the product’s performance characteristics.
