The bicycle has a "unique advantage" (built-in stereo system and rose gold color), indicating it's a differentiated product with features not commonly found in the market. This allows Hannes to target

The bicycle has a "unique advantage" (built-in stereo system and rose gold color), indicating it's a differentiated product with features not commonly found in the market. This allows Hannes to target customers willing to pay a premium for these unique features.

• a. Discretionary pricing: This is a broad term and not a specific strategy for new product introduction.
• b. Price skimming: This strategy involves setting a high initial price for a new, unique product to "skim" maximum revenue from early adopters who are less price-sensitive. As demand from this segment is satisfied, the price can be lowered to attract more price-sensitive customers. This is suitable for products with unique features and little competition.
• c. Predatory pricing: This involves setting very low prices to eliminate competition, which is often illegal and not a strategy for leveraging unique advantages.
• d. Price penetration: This strategy involves setting a low initial price to quickly gain market share, typically used for products entering a competitive market or when the goal is rapid adoption. It's not ideal for a product with unique, premium features.

Given the unique advantages of the bicycle, Hannes should choose a strategy that capitalizes on its novelty and premium appeal.

The correct option is b.

b) Price skimming