CLEP Marketing

Answer: A - An Aveda beauty products retailer introduces the newest line of self-tanners in a number of large stores. The prices are set high with an eye on loyal customers in what is considered market skimming. Market skimming occurs when a retailer or, company deliberately sets prices at a high rate to “skim” maximum revenue from the target consumers. To do this, the products have to be of sufficiently high quality and brand equity to justify the high prices. Additionally, the prices should not be too high so that loyal and new consumers are not turned away. Finally, prices should not be so high that competitors could undercut and offer much lower prices.