Nestle Nestle Water

Market skiming pricing:

Many companies that invent new products set high intial prices to skim revenue layer by layer from the market. Nestle use this strategy called market skiming prices for it’s mineral water product. To skim maximum prices because it was the frist product of this type in Pakistan. This product was purchased only by customers who could afford to pay high price for this new product. Nestle skimed the maximum amount of revenue from the various segments of the market. Market skiming make sense only under certain conditions. First the product’s quality and image must support its higher price and cnough buyers must want the product at the price. Second the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more. Finally competitors should not be able to enter the market easily and undercut the high price.

Segmented pricing:

Companies will often adjust their basic prices to allow for differences in customers products and locations. In segmented pricing the company sells a product or service at two or more prices even though the difference in prices is not based on differences in costs. Segmented pricing takes serval forms. Under customer-segment pricing. Different customers pay different prices fot he same product or service. For example if you buy 0.5 litter bottle of nestle mineral water you have to pay 15 rupees but on the other side by paying double price 30 rupees you can get 1.5 litter of Nestle mineral water. In this way you got extra 0.5 litter in the same price but the difference is that some one who don’t like to carry or waste water will buy a 0.5 litter bottle because he is not price concious but the person who is price concious will buy 1.5 litter of Nestle bottle instead of 0.5 litter.