When General Motors introduced the Saturn, it priced the SL sports sedan at $2,000 less than the Toyota Corolla DLX and $1,500 less than comparable Nissan and Honda automobiles. What pricing strategy is this an example of?
A) skimming
B) loss-leader
C) competitive
D) penetration

Question

Quizplus · Accepted Answer

Penetration pricing strategy involves setting the price of a product lower than the competitors' prices to gain market share quickly. By pricing the Saturn lower than its competitors, General Motors was using penetration pricing to attract customers who might otherwise purchase from Toyota, Nissan, or Honda.

When General Motors Introduced the Saturn, It Priced the SL