Is Penetration a new word or it already exists ???? 😎😎

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 Penetration pricing is a pricing strategy in which a company sets a low initial price for a new product or service when entering a market. The primary objective of penetration pricing is to quickly gain a significant market share and attract a large number of customers. This strategy is often employed when the company aims to achieve rapid growth and outperform competitors in the early stages of market entry.


Key characteristics of penetration pricing include:


1. Low Initial Price: The product is introduced at a price significantly lower than competitors' prices to create a strong incentive for customers to try the new offering.


2. Market Entry: Penetration pricing is commonly used when entering a new market or launching a new product category, as it helps to generate interest and build a customer base quickly.


3. Market Penetration: By offering a lower price, the company aims to capture a larger portion of the market and increase its market share rapidly.


4. Gradual Price Increase: After gaining a foothold and establishing a customer base, the company may gradually increase prices to more sustainable levels. This is done to improve profitability once the product gains acceptance and customers recognize its value.


Penetration pricing can be effective in creating a buzz around a new product and encouraging early adoption. However, it requires careful planning to ensure that the initial low prices are financially viable and that the company can cover costs as the product gains traction. Additionally, companies should be prepared for potential price wars with competitors who may respond with price reductions of their own. Penetration pricing is a dynamic strategy, and the company must be flexible in adjusting prices based on market response and competition.

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