Penetration Pricing

Penetration pricing is a strategy where a company sets a low initial price for a new product to attract customers and gain market share quickly. The idea is to encourage more people to buy the product, helping the company establish a foothold in the market. Once the product gains popularity and a loyal customer base, the company may gradually raise the price. This approach is often used in competitive markets to differentiate the product and entice customers to try it, overcoming barriers that might prevent them from choosing a new or unfamiliar brand.