Which of the following is true of penetration pricing?
A)Penetration pricing is a variation of a premium pricing strategy.
B)Penetration pricing is a mass-market strategy rather than a niche strategy.
C)Penetration pricing is best used when there are no competitors in the market and entry is difficult.
D)Penetration pricing is used in a market where product differentiation is high.
E)Penetration pricing is most effective when potential customers are quality-sensitive rather than price-sensitive.

Question

Quizplus · Accepted Answer

Penetration pricing is a strategy used to enter a new market and gain market share by setting a low price for the product. This strategy is best suited for a mass-market strategy rather than a niche strategy. Option A is incorrect because penetration pricing is not a variation of a premium pricing strategy. Option C is incorrect because penetration pricing is used when competition is already in the market and entry is easy. Option D is incorrect because penetration pricing is used in a market where product differentiation is low. Option E is incorrect because penetration pricing is most effective when potential customers are price-sensitive, not quality-sensitive.

Which of the Following Is True of Penetration Pricing