skim pricing

Establishing a relatively high price for a product or service; also called high-price strategy. This usually works for product innovations with limited competition and a low or negative price elasticity of demand. Skim pricing enables the seller to more rapidly recover the costs of development and introduction. This strategy carries some risk in that it will attract more competitors to the market and may antagonize consumers. A skim pricing strategy also works well with prestige products such as perfume. See also low-price strategy; prestige pricing.