Answer :
When a company wants to reach a market group that is mostly price insensitive and willing to pay a premium price for the value gained, they utilize price skimming.
Skimming is a pricing technique that involves setting initial product prices high and then lowering them when rivals enter the market. Skim pricing is the reverse of penetration pricing, which sets low initial rates for newly released items in an effort to attract a large consumer base.
Businesses use a skim pricing model for a number of reasons, such as to attract early adopters, increase short-term profit, and segment clients as the price declines in accordance with what they are prepared to pay for a new product. If a company is releasing a product that people view as revolutionary and a necessary must-have, they might be able to succeed with a price skimming strategy.
Option D is the correct answer.
The complete question is, " A company uses _____ when the objective is to reach a segment of the market that is relatively price insensitive and thus willing to pay a premium price for the value received.
A. penetration pricing
B. everyday low pricing
C. predatory pricing
D. price skimming
E. psychological pricing"
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