Which pricing strategy might create a perception of exclusivity for a product?

Market skimming is a pricing strategy that sets a high initial price for a product to maximize revenue from early adopters who are less price-sensitive. This approach is often used for innovative or exclusive products, creating a perception of exclusivity. By starting with a high price, companies can attract consumers who see the product as premium or high-quality, thus enhancing its perceived value and desirability.

This strategy is particularly effective for products that are new to the market or have innovative features not found in competing offerings. As sales begin to slow, the price may gradually be lowered to attract more price-sensitive customers, but the initial high price aids in establishing a strong reputation of exclusivity from the outset.

In contrast, value-based pricing centers on the perceived value to the customer, which may not always result in exclusivity. Low-cost pricing suggests affordability and mass appeal, undermining exclusivity. Dynamic pricing adjusts prices based on market demand and can shift perceptions quickly, but doesn’t inherently foster a sense of exclusivity in the same way market skimming does.