Loss Leaders

here's a presentation on Loss Leaders

http://www.slideshare.net/slideshow/embed_code/1028813?rel=0&hostedIn=slideshare#

#business

Pricing - What is Market Skimming?

This is a pricing tactic that is often used in electronics.

When the product is first released the price is set high, quite often a premium price. Once the people who want and can afford it have bought it, the price is lowered to target the next strata of customers – in other words the next level of customers who can afford it. This is akin to ‘skimming’ the cream off the top and then repeating the process.

Eventually the price of the product will come down to a more competitive price which will be affordable by the majority of consumers, the mass market.

For example when the PS3 was launched it was very expensive, but just in time for the Christmas market. It soon came down in price before the slimline version was launched which is viewed as a product extension.

It won’t be long though before we have a PS4 I am sure.

Microsoft Tablet Pricing Arrives

Microsoft has revealed it will charge $899 (£560) for the basic version of its Surface with Windows Pro tablet. The device will be released in January and features an Intel chip allowing it to run the full version of the Windows 8 operating system.

The price is $400 more than the existing Surface with Windows RT tablet, which is less powerful and does not run programs such as Photoshop.

The devices are intended to challenge the iPad and Android-based tablets.

Microsoft's chief executive, Steve Ballmer, told shareholders this week that the fact his firm was releasing its tablets more than two years later than Apple might have contributed to its share price being outpaced by its rival.

"Maybe we should have done that earlier," he said. The Surface is designed to be combined with a keyboard which is sold separately He had earlier suggested that he was certain sales of the original Surface would grow.

"We've had a modest start because Surface is only available on our online retail sites and a few Microsoft stores in the United States."

Source: BBC Business News