When launching new offerings, organizations tend to adopt either penetration pricing or the price skimming strategy. In the first approach, they charge a lower price to generate a large volume of sales and recoup their research and development (R&D) investment (hence penetration pricing).

Question

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Penetration pricing involves setting a low price for a new product to attract a large number of customers and a significant market share quickly, aiming to recover the R&D costs through high volume sales.

When Launching New Offerings, Organizations Tend to Adopt Either Penetration