Price skimming
Launching at a high price to sell first to the buyers who want the product most and pay most, then lowering it step by step to reach more price-sensitive groups. It recovers development costs fast and signals quality. It needs a product that is clearly better or new, and a gap before competitors catch up; early buyers who see the price drop soon after can feel cheated.
Where it's used
Used for new technology, premium consumer products, games and books in hardcover, then paperback. Good when early adopters value being first and competitors need time to copy.
Example
The first iPhone price cut
AppleApple launched the first iPhone in June 2007 at 499 and 599 dollars. About ten weeks later it cut the 8 GB model to 399 dollars to reach more buyers before Christmas. The price cut drew complaints from early buyers, and Apple answered with a 100 dollar store credit for them. Skimming worked, but it showed the cost of moving the price too fast.