Colourful Concoctions,a maker of children's crayons,decides to price its boxes of crayons below the long-term market price.The firm agrees to reduce its profit margin from 30 percent to 5 percent in the short term in order to increase market share and discourage other firms from entering the crayon market.What strategy is Colourful Concoctions implementing?

Question

Quizplus · Accepted Answer

Colourful Concoctions is implementing penetration pricing, which involves pricing a product below the long-term market price in order to gain market share and discourage competitors from entering the market. This strategy typically involves sacrificing short-term profits for long-term success.

Colourful Concoctions,a Maker of Children's Crayons,decides to Price Its Boxes