Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and pricing.

The multiple-choice for the question is missing, however, the complete question is stated below:

Companies facing the challenge of setting prices for the first time can choose between two broad strategies: market-penetration pricing and pricing.

A) comparative

B) competitive

C) market-skimming

D) market-segmentation

E) cost-plus

The correct answer is:

C) market-skimming

Explanation:

when companies launch a new product or service, there are two kinds of marketing strategies used, and they are market-penetration and market-skimming pricing

Market-penetration Pricing: This involves the use of a low upfront price to attract customers, hence enabling the product to penetrate the market as quickly as possible, as the low price compels a large number of customers to purchase the product. Although the profit margin is low, the company can generate profit through a high volume of sales.

Market-skimming Pricing: In this strategy, the company initially introduces the goods/services into the market at a high price, with the intention of skimming the "cream" for the market. This way, the company gains maximum profit on the product/service in a short term, as lesser number of goods with a high profit margin are sold.

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