Which term describes the pricing strategy where a product is introduced at a high price and gradually lowered?

Price skimming is a pricing strategy where a product is launched at a high price, allowing the company to maximize revenue from early adopters who are willing to pay more for the latest or most innovative products. As the initial demand from these customers is satisfied, the company then gradually reduces the price to attract more price-sensitive customers. This approach enables businesses to recover development costs quickly and gain market share as the price decreases over time.

In contrast, penetration pricing aims to attract customers by setting a low initial price to gain market share quickly. Competitive pricing focuses on setting prices based on competitors' strategies, pricing just low enough to attract buyers without significantly undercutting the competition. Cost-plus pricing involves calculating the total costs of production and adding a markup to ensure profitability, rather than adjusting prices based on market demand or customer willingness to pay.