Asked by Morgan Burroughs on May 28, 2024
Verified
What are the conditions favoring the use of penetration pricing?
Penetration Pricing
A marketing strategy that involves setting a low price for a new product to attract customers and gain market share quickly.
- Examine different pricing tactics including predatory, experience-curve, skimming, penetration, and odd-even pricing, and understand their implications for market strategy.
Verified Answer
KS
Kavita SutarwalaJun 01, 2024
Final Answer :
The conditions favoring penetration pricing are the reverse of those supporting skimming pricing and are (1) many segments of the market are price-sensitive, (2) a low initial price discourages competitors from entering the market, and (3) unit production and marketing costs fall dramatically as production volumes increase.
Learning Objectives
- Examine different pricing tactics including predatory, experience-curve, skimming, penetration, and odd-even pricing, and understand their implications for market strategy.