A research study indicates a large market segment exists for a new product, but that this segment is highly price elastic. An appropriate pricing strategy is
A) penetration pricing.
B) skimming pricing.
C) price lining.
D) a broad price policy.

Question

Quizplus · Accepted Answer

Penetration pricing is appropriate for a market segment that is highly price elastic because it involves setting a low initial price to attract a large number of buyers quickly and win a large market share. The sensitivity to price changes means consumers are likely to respond positively to lower prices.

A Research Study Indicates a Large Market Segment Exists for a New