Penetration pricing

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.[1] The strategy works on the expectation that customers will switch to the new brand because of the lower price. Penetration pricing is most commonly associated with marketing objectives of enlarging market share and exploiting economies of scale or experience.[2]

  1. ^ J Dean (1976). "Pricing Policies for New Products". Harvard Business Review. 54 (6): 141–153.
  2. ^ GJ Tellis (1986). "Beyond the Many Faces of Price: An Integration of Pricing Strategies". Journal of Marketing. 50 (October): 146–160. doi:10.1177/002224298605000402. S2CID 154579061.