Unlocking Success with Skimming Pricing Strategy

How did Xerox set its pricing strategy for the first portable fax machine in 1980?

Did Xerox use a skimming pricing technique?

Xerox's Pricing Strategy for the First Portable Fax Machine

Yes, Xerox implemented a skimming pricing technique when introducing the first portable fax machine in 1980 with a high introductory price of $12,700.

Skimming pricing strategy is a key approach used by businesses to maximize profits when launching new and innovative products. By setting a high initial price, companies can capture a significant portion of the market's early adopters and recoup their product development costs quickly.

With the case of Xerox and their portable fax machine, the skimming pricing technique allowed the company to establish a strong market presence and generate substantial revenue before facing competition. This strategy helped Xerox cover its investment in developing the groundbreaking technology and position itself as a leader in the industry.

By leveraging skimming pricing, Xerox demonstrated the effectiveness of strategic pricing decisions in driving success and growth in a competitive market. The company's bold pricing strategy paid off by enabling it to secure a significant market share and establish a strong foundation for future innovations.