Which pricing strategy involves launching a new product at a high price to recover research and development costs?

The pricing strategy that involves launching a new product at a high price to recover research and development costs is known as market skimming. This approach is typically utilized for innovative products or those with unique features, where the initial high price capitalizes on early adopters who are willing to pay more for access to the latest technology or features. The goal of market skimming is to maximize profits in the early stages of the product life cycle before competitors enter the market or demand begins to wane. By setting a high price initially, a company can quickly recover its substantial investment in product development and marketing.

In contrast, a strategy like quality assurance does not pertain to pricing but rather to ensuring that products meet specific quality standards. Loss leaders refer to pricing products at a low price (or below cost) to attract customers, hoping that they will make additional purchases. Promotional pricing involves temporary price reductions to promote sales or encourage quicker purchase decisions. These strategies serve different purposes than market skimming and do not focus specifically on recovering R&D costs through high initial pricing.