Country variations lead to many ways of segmenting the market. Consumers in some
countries simply like certain products more and are willing to pay more for them. Depending
upon market conditions, a firm may adopt any of the following pricing strategies:
– A skimming strategy sets a high price for a new product, which is aimed at market innovators.
Over time, the price will be progressively lowered in response to demand and supply conditions,
i.e., the presence of additional competitors.
– A penetration strategy sets an aggressively low price to attract a maximum number of
customers (some of whom may switch from other brands) and to discourage competition.
– A simple cost-plus strategy sets the price at a desired margin over cost. Cash versus credit
buying also affects demand.