Asked by Jonathan Conkle on May 19, 2024
Verified
What term describes a pricing strategy in which the initial price is set relatively low for a new product in order to gain a large market share?
A) Penetration pricing
B) Target pricing
C) Designed pricing
D) Market share pricing
Penetration Pricing
A pricing strategy that involves setting a low price for a new product in order to attract customers and gain market share quickly.
Market Share
The percentage of an industry's total sales that is earned by a particular company over a specified time period.
Initial Price
The original cost or price of a good or service when it is first offered for sale, often used as a baseline for pricing strategies.
- Understand the differences and uses of different pricing strategies, including skimming, penetration, and predatory pricing.
Verified Answer
JW
jorDann WrightMay 20, 2024
Final Answer :
A
Explanation :
This describes penetration pricing, which aims to encourage large numbers of consumers to try a new product by setting a lower initial price. This can help the product gain traction in the market and build a larger customer base.
Learning Objectives
- Understand the differences and uses of different pricing strategies, including skimming, penetration, and predatory pricing.