When a business prices a new product much lower than competing products when they enter new industries that have dozens of competing brands, this is referred to as _______________________.
A) predatory pricing
B) skimming pricing
C) penetration pricing
D) competitive pricing

Question

Quizplus · Accepted Answer

Penetration pricing is the practice of setting a low price for a new product or service during its initial offering in order to attract customers and gain traction in a crowded market. It is often used by businesses entering new industries with multiple competitors as a way to quickly establish a customer base and gain market share. This differs from predatory pricing, which involves setting very low prices with the intention of driving competitors out of business, and skimming pricing, which involves setting high prices for a new product with the intention of targeting early adopters and maximizing profits. Competitive pricing is simply setting prices in line with or in response to the prices of competing products.

When a Business Prices a New Product Much Lower Than