When should I use penetration pricing?

What is penetration pricing and when should I use it?

Penetration pricing is a strategy where a product is launched at a low price to attract customers quickly. It's best used when entering a competitive market.

What are the benefits of using penetration pricing?

The main benefits include gaining market share quickly, attracting price-sensitive customers, and discouraging competitors.

Are there any risks associated with penetration pricing?

Yes, risks include potential losses if the price is too low, difficulty raising prices later, and attracting customers who may not be loyal.

Can you give me an example of a company that successfully used penetration pricing?

Sure! Netflix initially used penetration pricing by offering low subscription rates to attract users, which helped them grow rapidly.