ECONOMICS
MARKETS AND PRICES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When a product has a recognisable brand name
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When a product is known for its quality
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When a product is no longer in demand due to technological changes
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When there is a lot of competition in the market
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When there is little or no competition in the market
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Detailed explanation-1: -Penetration pricing is a marketing strategy used by businesses to attract customers to a new product or service by offering a lower price during its initial offering. The lower price helps a new product or service penetrate the market and attract customers away from competitors.
Detailed explanation-2: -Penetration pricing is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers. The strategy works on the expectation that customers will switch to the new brand because of the lower price.
Detailed explanation-3: -In a predatory pricing scheme, prices are set unrealistically low in order to eliminate competitors and create a monopoly. Consumers benefit from lower prices in the short term but suffer in the long term as the successful predator has eliminated choice and is free to raise prices.
Detailed explanation-4: -Penetration pricing A penetration pricing strategy is the opposite of price skimming. Instead of starting with high prices, you start with low prices and gradually increase them as they gain traction.