Penetration pricing products
Penetration pricing is a pricing strategy where the price of a product is initially set low to rapidly reach a wide fraction of the market and initiate word of mouth. The strategy works on the expectation that customers will switch to the new brand because of the lower price.Penetration pricing strategy is generally used by late comers in the market. This pricing is typically used when the market is saturated or there are already many variants of the same product present in the market. Penetration pricing gives an edge to the company because many customers are attracted to penetration pricing products
Dec 19, 2016 Thats where penetration pricing comes in. Penetration pricing introduces customers to a new product at a steep discount, and often at a loss to the merchant. The hope with using a penetration pricing strategy is that youll create brand loyalty and get customers to love your product, increasing their willingness to spend more down the road.