The new-product pricing strategies of price skimming and penetration pricing were defined, explaining common practices used based on the product type and placement in the market. Techniques include odd-even pricing, prestige pricing, and artificial time constraints

In this chapter, we explored the process of setting pricing for products and services and the importance of pricing to the profitability of a business. We defined fixed and variable costs and how they factor into the break-even equation in initial pricing decisions.

price skimming — pricing strategy in which a company initially sets a high price for a product or service and lowers it over time as new segments of the market are reached. penetration pricing — new product or service strategy that sets the lowest price possible in order to reach the majority of the market in the introduction stage. prestige pricing — a strategy marketers use to set high prices knowing that demand will increase with higher prices because the higher price increases the perceived value of the product. odd-even pricing — psychological pricing strategy that uses prices that end with odd or even numbers to attract customers.