Penetration pricing strategy delivers results:

(A) Where price quality association is weak

(B) When the product is perceived as a 'high technology' product

(C) When the market is characterised by intensive competition

(D) When the firm uses it as an entry strategy

Choose the most appropriate answer from the options given below:

The correct answer is A, C, D only

Key PointsPenetration pricing:

• Penetration pricing is a sort of pricing that is particularly aggressive.
• In order to increase customer demand, a company uses this strategy to set its pricing very cheap (sometimes even with a negative margin).
• The corporation then raises the price again, in the hopes of capturing the same degree of client demand as with its previous extremely low pricing.

Important Points Penetration pricing strategy is helpful:

• Where price has a weak relationship with quality.
• When There is competition in the market.
• When It is a strategy to enter the market.