Penetration Pricing

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Description of Penetration Pricing. Explanation.

Definition Penetration Pricing. Description.

Penetration Pricing is a market-based approach to pricing wherein the price is set to a sufficiently low level (below the prices of competing products) to make the product attractive to the mass market. The aim is to achieve a large market share by high initial sales. It is introducing the product at a low price intended to capture the mass market for the product or service.

It is a particularly attractive mechanism for products where unit cost reductions can be achieved through economies of scale. Other advantages include potentially fast diffusion and adoption curves, word of mouth effects, and new competitors are discouraged from entering the market (compare: Five Forces). Disadvantage are the difficulty of raising prices after the desired penetration rate has been accomplished, and also the pricing mechanism may be detrimental to the perceived brand value of the product and to the reputation of the company.

Penetration Pricing Forum   Why Penetration Pricing? Why are certain organisations using a penetration pricing strategy?...           Penetration Pricing, Description To the point description. Highly effective approach to grab the market of choice....         Begin a new topic

Penetration Pricing Special Interest Group Special Interest Group

Best Practices - Penetration Pricing Premium

Expert Tips - Penetration Pricing Premium

Resources - Penetration Pricing Premium Overview of Pricing and Pricing Strategies This presentation contains an overview of various pricing strategies, including for example pricing based on competition; psychological pricing; cost-... Usage (application): Pricing     News Penetration Pricing         Videos Penetration Pricing         Presentations Penetration Pricing         More Penetration Pricing

Compare with: Competitive Pricing  |  Price Skimming  |  Cost-plus Pricing  |  Standard Cost Pricing  |  Marginal Cost Pricing  |  Target Pricing  |  Perceived Value Pricing  |  Psychological Pricing  |  Promotional Pricing  |  Discount Pricing

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