![]() In real life, you can see penetration pricing in a one-month free subscription of an online news website or a six-month free checking account of a bank, or many more. The strategy will help them to attract new customers away from competitors and retain them when rates go up to normal levels afterward. More specifically, they build market share by offering a lower price when they first come to the market. ![]() This marketing strategy helps businesses to attract customers to try a new product or service. Penetration pricing break down Penetration pricing break down Pricing penetration is adopted with the hope of increasing market share and enhancing economies of scale. ![]() By doing this, the consumers that interested in a lower price are expected to move to the new brand. What is penetration pricing Penetration pricing Definition What is penetration pricing?Īccording to Wikipedia, penetration pricing is a pricing strategy in which the price of an item is originally set low to quickly reach a significant proportion of the marketplace and encourage word of mouth. Now, let’s discover this pricing strategy and decide whether you can apply it to your company. In this article, we will describe What is Penetration Pricing? Pros, Cons & Examples. Well, if you are the later comer in the market, you should consider using the penetration pricing strategy. If you offer your products or services to your customers, then you must wonder which is the most effective pricing strategy.
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