Pricing products at a loss for certain amount of time is characteristic of a ________ strategy.
A) penetration pricing
B) market holding
C) cost-plus pricing
D) market skimming

Question

Quizplus · Accepted Answer

Pricing products at a loss for a certain amount of time is a characteristic of penetration pricing strategy. This strategy is used to enter a new market by setting prices lower than competitors to quickly gain market share. The aim is to attract price-sensitive customers who will switch from competitors' brands to the new one due to the lower price. Once a certain level of market share is achieved, the company can increase its prices to more profitable levels.

Pricing Products at a Loss for Certain Amount of Time