So it is applied by latecomers or newcomers to gain their position in the market.Ī big example of the companies adopting a penetration pricing strategy is UNILEVER. Although usually, it is for normal consumable products like shampoo, a soap about which consumers are not brand conscious and can switch by observing fluctuation in price. This price penetration strategy can be adopted by a local surf brand by keeping its price low to already existing brands in the market. Most of the time this appeal is used by the manufacturers who enter the market late, so this strategy is adopted by the latecomers to compete with baby boomers and already existing competitors. This pricing strategy is usually adopted by local product producers and for local brands and is for the new entrants to endorse products by keeping the initial prices at a fairly low rate to attract the consumers. You can keep your price low and compete in the market.Īpplying this tactic you have to make a huge promotion of the qualities of your new product so that it can gain its place among competitors. By using this idea you can diffuse new products in a previously existed market in which there are huge rivals. This strategy is implemented by the marketers for achieving the high ratio of sales for their new product by keeping it economical. Penetration pricing is the market concept adopted for a new product to be launched in a market with low prices so that it may penetrate the market and can gain its position amongst the rivals.
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