Soltex Inc.,a home products manufacturer,is introducing a new paper coffee filter at a dramatically reduced cost.Soltex is entering a market already saturated with stiff competition.Which pricing strategy will enable Soltex to achieve market recognition?
A)Skimming pricing
B)Penetration pricing
C)Psychological pricing
D)Cost-based pricing

Question

Quizplus · Accepted Answer

Penetration pricing is the strategy where a product is introduced to the market at a low price in order to gain market share quickly. This approach is particularly effective in markets that are saturated with competition, as it can attract customers who are sensitive to price differences. By offering the new paper coffee filter at a dramatically reduced cost, Soltex Inc. aims to quickly attract attention and encourage consumers to try their product over competitors', thereby achieving market recognition.