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And in a market heavily driven by consumer trust and brand loyalty, many consumers are reluctant to switch brands or try new products. After all, the reasoning goes, why spend money on a product that might be awful? Penetration pricing introduces customers to a new product at a steep discount, and often at a loss to the merchant. Here are five examples of penetration pricing strategies being put to work.
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In a crowded retail landscape it can be very difficult to entice new customers and increase your market share. In such a competitive marketplace, one tried and true method for increasing sales is to use penetration pricing to attract customers to new products. Penetration pricing is the practice of setting a low initial price for a product or service. Having the lowest price among your competitors will immediately draw attention to your business.
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As soon as a company enters a new market, it strives for market penetration. The main objective behind the market penetration strategy is to launch a product , enter the market as swiftly as possible and finally, capture a sizeable market share. Market penetration is also, sometimes used as a measure to know whether a product is doing well in the market or not. Watch our Demo Courses and Videos. A company trying to adopt the concepts of market penetration must remember to also implement specific plans and tactics to challenge the competitors and boost sales figures.
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