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    PracticeACCAACCA PM — Performance Management Practice Exam 2Question 12
    Easy2 marksMultiple Choice
    Decision-making techniquesSyllabus CPricing StrategiesMarket Skimming

    ACCA · Question 12 · Decision-making techniques

    Section A

    SkyHigh Aerospace has developed a revolutionary new lightweight drone. They have a patent on the technology and there are currently no direct competitors. The company needs to recover high research and development costs quickly before competitors reverse-engineer the product.

    Which pricing strategy is most appropriate for SkyHigh Aerospace?

    Answer options:

    A.

    Penetration pricing

    B.

    Market skimming

    C.

    Marginal cost pricing

    D.

    Loss leader pricing

    How to approach this question

    Identify the pricing strategy used for innovative, patented products with high R&D costs and no immediate competition.

    Full Answer

    B.Market skimming✓ Correct
    Market skimming is the strategy of charging high prices initially to 'skim' the maximum profit from the market segment willing to pay a premium for a novel product. It is ideal for products with high R&D costs, short life cycles, or patent protection.

    Common mistakes

    Confusing skimming with penetration pricing.
    Question 11All questionsQuestion 13

    Practice the full ACCA PM — Performance Management Practice Exam 2

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