Discuss in detail why penetrating pricing is more likely than skim pricing to raise a company’s

Discuss in detail why penetrating pricing is more likely than skim pricing to raise a company’s or a business unit’s operating profit in the long run?

 Skimming Pricing is the strategy of establishing a high initial price for a product with a view to skimming the cream off the market at the upper end of the demand curve. Raising a low price may annoy potential customers and anticipated drops in price may retard demand at a particular price. This model depends on selling enough units at the higher price to cover promotion and development cost. Skimming pricing is a short term model that is used to gain high large profits in a quickly manner. Therefore it can’t be used to raise long term operating profits.