Global marketing Research Paper Example | Topics and Well Written Essays - 750 words

Global marketing - Research Paper Example & Carl (2010) the skimming pricing strategy is most effective in market conditions where the customers are more than willing to pay above average market price for goods and services. They also note that this strategy is effective for copyrighted, patented or trademarked products and innovative technological breakthrough. Apple has effectively employed the skimming strategy by introducing innovative technological products at a relatively high price (Smith, 2011). Penetration pricing strategy involves charging a lower price for a product relative to competitors’ price level, with the main objective serving the mass market and increasing the firm’s market share (Smith, 2011). The rationale for charging low price is that it would increase market share and economies of scale thus significantly lowering the overall production costs. In contrast to the skimming pricing strategy, charging lower prices implies that the firm relies on higher sales volume to attain break-even because of the low profits per unit of production (Tellis, 1986). Similarly, firms tend to take a longer period to recover the production costs using penetration strategy as compared to the skimming strategy. In addition, penetration pricing differs from skimming pricing because it tends to discourage entry of competitors in the market. Lamb, Joseph & Carl (2010) argue that penetration pricing strategy is more viable and effective in price sensitive market condition s. Smith (2011) observes that the penetration pricing strategy has been effectively implemented by Wal-Mart retail stores and android in order to capture the mass market and increase their market share. Holding pricing is a pricing decision that seeks to retain and maintain the market share (Smith, 2011). Currency fluctuations in the global business context may encourage firms to initiate price variations and adjustments in order to hold or maintain their market share. These price adjustments may affect the firm’s profitability, at