Loyal Cosmetics is planning to launch a new range of ‘Hair Colour Dyes’ in the market. They conducted a market survey and set the price much higher than their competitors, which would not be afforded by lower middle class customer.
(i) Identify and explain the pricing strategy that is being used by Loyal Cosmetics.
(ii) What values are ignored by company while setting price for a product?
(i) Loyal Cosmetics adopted the skimming price strategy. In this, a very high price is set so that in the initial stages, the investment made in product is quickly realised.
(ii) Values ignored by the company are:
(a) Social responsibility of producing goods at reasonable prices.
(b) Concern for the poorer sections of the society.