The major objectives associated with a market penetration pricing strategy are to
A) capture the high end of the market demand curve and lower introduction costs.
B) quickly build sales and market share.
C) minimize customer dissatisfaction and maximize reference price value.
D) provide an incentive to purchase a less desirable product to obtain a more desirable product.
E) match competitors' prices and communicate high quality.

Question

Quizplus · Accepted Answer

The major objective of a market penetration pricing strategy is to quickly build sales and market share by setting a low price to attract customers and gain a foothold in the market. This strategy is particularly useful for new products or companies entering a crowded market. Option A is incorrect because capturing the high end of the market demand curve would suggest a premium pricing strategy, which is opposite to a penetration strategy. Option C is incorrect because customer dissatisfaction is not a focus of market penetration pricing, and reference price value is more relevant to prestige pricing. Option D is incorrect because it describes a bundling strategy, not a penetration strategy. Option E is incorrect because the goal of a penetration strategy is not necessarily to match competitors' prices, but to undercut them by setting a lower price.

The Major Objectives Associated with a Market Penetration Pricing Strategy