Which pricing strategy involves setting a high price for a new product to maximize profit from early adopters?

The strategy that involves setting a high price for a new product to maximize profit from early adopters is known as skimming pricing. This approach is particularly useful in markets where innovation is high and there are consumers willing to pay a premium for being the first to own a new product. By initially pricing the product at a higher level, companies can capitalize on this eagerness and willingness to pay, thus recovering development costs quickly and maximizing profits from the segment of consumers less sensitive to price.

As the market begins to saturate and competition increases, the company may choose to lower the price to attract a broader customer base. This staggering of pricing not only allows for capturing the maximum amount from early adopters but also positions the product competitively as it becomes more accessible to the general market over time. Skimming pricing is particularly effective in technology sectors, where new innovations often draw initially high demand from those eager to have the latest advancements.