Using Penetration Pricing Strategy As a Retailer: Overview and Example
Korona
APRIL 2, 2022
Penetration pricing consists of setting lower prices (sometimes even with a negative margin) than the competition to spur sales during the initial launch period. Brands often use this pricing strategy for a product with strong competition or a relatively new idea. The low price helps penetrate the market by attracting the attention of more consumers than a higher price would otherwise, allowing the brand to gain a foothold against competitors in these early stages.
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