Texas Instruments builds a large plant to produce a great quantity of products, hoping that as prices decline, sales volume increases and thus costs decline. What pricing strategy has TI used in order to maximize their market share?
A) reference pricing
B) marketing skimming pricing
C) objective pricing
D) market penetration pricing
E) survival pricing

Question

Quizplus · Accepted Answer

TI has used market penetration pricing strategy where prices are set low to gain a large market share. The aim of this strategy is to attract customers away from competitors and also to discourage potential new entrants into the market. The large plant built by TI is to produce a great quantity of products which will enable price reductions due to their economies of scale, resulting in increases in sales volume and lower costs for the company.

Texas Instruments Builds a Large Plant to Produce a Great