In the product life cycle, the skimming strategy serves as the launch point for achieving sales objectives. It involves highlighting the best qualities of a product during communication to attract the maximum number of customers. What does the skimming strategy entail and what are its advantages? The following article sheds light on these various points.
What is a skimming strategy?
The skimming strategy, as its name suggests, involves revealing the cream of the crop, that is, high-value products. These products are aimed at a very limited and significant target audience. This strategy aims to leverage customer psychology to offer them a rare and high-quality product that allows them to stand out from the crowd.
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The customer thus obtains a high-end product that enhances their social status and allows them to distinguish themselves from the masses. The image of the product and that of the customer go hand in hand to foster a successful skimming strategy with a good marketing strategy.
What does a skimming strategy consist of?
The operation of a skimming strategy is based on three main points: profitability, brand image, and flexibility. Each of these points contains advantages and disadvantages. It is therefore essential to be well-informed about the various parameters of this strategy before committing to it.
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Profitability
For example, we can take the famous brand Apple, a leader in the mobile phone market for about twenty years. This brand has chosen an elite positioning to assert itself and stand out from the competition.
This company has both online and physical stores that offer not only smartphones but also tablets and Apple-branded computers. These devices, along with their accessories, are offered at prices significantly above those of smartphone promoters.
At Apple, the latest phone release is the iPhone 13 Pro Max. It is priced at 1,259 euros with storage capacities ranging from 128 GB to 1 TB. Meanwhile, its counterpart Samsung offers a smartphone with the same capacity for less than 1,000 euros.
Apple justifies such a price gap by highlighting the superior quality of its devices equipped with a unique and highly efficient system (iOS). Apple offers its customers the opportunity to belong to an exclusive circle with complete security for personal data. They also benefit from interaction only with Apple devices.
Thus, the greatest advantage of a skimming strategy is that it allows for a profitability in a relatively short time by leveraging profit margins. Costs can be quickly amortized with the generated profits.
Brand image
It allows for working to give the product a high valuation in the eyes of the customer. This premium positioning helps filter the clientele to attract only those customers willing to pay for the quality of the product. These customers, being prestigious individuals who care about their image, are thus more likely to be loyal. The premium aspect also creates the opportunity to generate a community of people who become brand ambassadors.
The downside at this stage is that it will be necessary to justify the price margin with the undeniable quality of the product that has never been challenged. It should be noted that a significant budget is always allocated to this type of communication, which increases the overall budget.
Flexibility
It is important in this type of communication to remain flexible and especially tenacious in the face of competition. The advantage here is that skimming allows for an evolving strategy. This strategy involves making an initial high-priced launch of the product and gradually lowering the price over time to broaden the customer base. Flexibility will also facilitate the autonomous management of the strategy.
On the other hand, the disadvantage of this strategy is the heaviness of the brand image in the psychology of customers. This means that they may remember the high price of the product even after it has been reduced.