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A company uses penetration prices if its product is entirely new to the market so it may charge low prices to increase market share. It may be observed that Porsche and Ferrariuse skimming pricing where they may charge a higher price as they know their specific customers will buy their product at any price. Sometimes companies have more fluctuating prices so an analyst should consider that their might be competition going on or a price war has broken through between rivals. For instance, Pepsi and Coke often indulge in such price wars. Sometimes psychological dimensions can be considered as well...
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