Tiger Airways entered the Australian air passenger services market as the lowest cost operator. Its fares are priced well below competitors. Tiger operates in a market that is highly price sensitive and one in which low prices stimulate market growth. Its costs have fallen as it has become more efficient at providing airplane service to its customers. Tiger Airways is MOST likely using a_________ pricing strategy.

Question

Quizplus · Accepted Answer

Tiger Airways is using a penetration pricing strategy by offering low fares to stimulate market growth and gain a foothold in the competitive Australian air passenger services market. As it becomes more efficient in providing airplane services, its costs have fallen, enabling it to sustain its low prices and attract price-sensitive customers.

Tiger Airways Entered the Australian Air Passenger Services Market as the Lowest