Which of the following factors argue for a penetration pricing strategy? A.The market potential is large,...
Which of the following factors argue for a penetration pricing strategy?
A.The market potential is large, and is expected to increase over the years.
B.It is highly likely that competitors will soon enter the market.
C.Higher levels of sales volume are likely to bring lower production costs per unit.
D.All of the above.
Homework Answers
Option C.
- Penetration strategy is a pricing strategy aimed at introducing a new product or a service to a customer by selling it at a lower price.
- This pricing strategy is used by most of the businesses to attract more customers to buy their products so that they will receive higher levels of sales volume.
- According to this strategy, when the firms or businesses experience higher levels of sales volume, the production costs per unit decreases for the producer's.
- But as the goods are priced very low, the competitor's are discouraged and it is highly unlikely that they will enter the market.
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