Penetration pricing makes the most sense in situations where a significant group of potential customers are willing to pay a premium price for the good.

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Penetration pricing is a strategy of setting a low price for a new product in order to attract a large number of customers and gain a foothold in the market. It is often used when there is little to no brand recognition or loyalty among potential customers. Therefore, it does not make sense to use penetration pricing when a significant group of potential customers are already willing to pay a premium price for the good.

Penetration Pricing Makes the Most Sense in Situations Where a Significant