penetration pricing
Low launch prices
Penetration pricing is a strategy of setting prices low to enter a market and capture share quickly.
The idea is to attract customers away from competitors, build a base, then raise prices once established.
Common with new products or services entering crowded markets: The streaming service used penetration pricing to undercut cable subscriptions.
- loss leaderDeliberately unprofitable merchandise
- economies of scaleCost advantages from size
- price warsCompeting through lower costs
- market sharePercentage of sector sales
- marginal costPer-unit production increase expense
foot in the door · discounting · volume discounts · demand curve · price sensitivity · price point · cheap · undercut · low price · sacrifice · launch · volume · aggressive · sales incentives · bait · bundling · customer retention · competitors
- pricingdiscount price, overpricing, discounts, overcharge, markdowns
- business strategystrategy, competitive advantage, market share, profitability, differentiation
- retail dealscoupons, rebates, discounts, flash sales, cashback
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