Which pricing strategy is focused on high initial prices to maximize profits from early adopters?

The pricing strategy that focuses on setting high initial prices to maximize profits from early adopters is price skimming. This approach is commonly used in markets for new and innovative products, where the initial pricing capitalizes on the willingness of certain customers to pay a premium for being the first to obtain a new product or service.

By establishing a high price point at the launch, companies can recover their development costs quickly and make the most of the demand among those early adopters who are less price-sensitive. As the product matures and competition increases, companies may gradually lower the prices to attract a broader audience and maintain sales volume.

This strategy is particularly effective for technology and specialty products, where the consumers are eager to be among the first to experience the latest offerings. Understanding the psychology of consumers and their willingness to pay is pivotal in implementing price skimming effectively.