What are some effective case studies on penetration pricing?
An example of an AI chatbot conversation about case studies on penetration pricing strategies.
What are some effective case studies on penetration pricing?
Penetration pricing is a strategy where a product is introduced at a low price to attract customers. One notable case study is Netflix, which initially offered low subscription rates to gain market share.
Can you tell me more about Netflix's strategy?
Sure! Netflix started with a low monthly fee to attract subscribers away from traditional rental services. This helped them build a large user base quickly.
What other companies have used penetration pricing?
Other examples include Spotify, which offered free trials and low-cost subscriptions, and Xiaomi, which priced its smartphones competitively to gain market share.
What are the risks of penetration pricing?
The main risks include potential losses if the pricing is too low, difficulty raising prices later, and attracting price-sensitive customers who may leave for cheaper alternatives.
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