You just opened a retail pet supply store,and have decided to use a penetration pricing strategy.A potential investor,however,is dismayed by your decision.To win her over,which of the following points should you make?
A)Demand for pet supplies is highly elastic.
B)Demand for pet supplies is highly inelastic.
C)A new store needs to focus on attracting shoppers.
D)Market-minus pricing would be inappropriate in the pet supply market.
E)The new store's introductory prices can be changed later in its life cycle.

Question

​You just opened a retail pet supply store,and have decided to use a penetration pricing strategy.A potential investor,however,is dismayed by your decision.To win her over,which of the following points should you make?
A)​Demand for pet supplies is highly elastic.
B)​Demand for pet supplies is highly inelastic.
C)​A new store needs to focus on attracting shoppers.
D)​Market-minus pricing would be inappropriate in the pet supply market.
E)​The new store's introductory prices can be changed later in its life cycle.

Quizplus · Accepted Answer

Penetration pricing is effective when demand is elastic, as lower prices attract more customers. A new store needs to attract shoppers to build a customer base, and introductory prices can be adjusted later as the store establishes itself.

​You Just Opened a Retail Pet Supply Store,and Have Decided

You Just Opened a Retail Pet Supply Store,and Have Decided