Market Skimming is basically a marketing strategy that deals with pricing of a product. In this strategy, a producer sets high price for a new product. Normally this pricing strategy is used for high end products like mobile phones, perfumes etc. The objective of this strategy is to reap the maximum revenue from the market before any kind of substitute product is available. After some time when some competitors enter the market, the producer normally lowers the price to capture the rest of the market.
On the other hand, Market Penetration is a strategy which is used by a company to increase the sales of its current prices. The company can lower the prices in this strategy to increase the users of its product or can also come up with bundle offers or variations of existing products.