Which of the following is an advantage of utilizing penetration pricing?
A)It helps a firm recover R&D costs quickly.
B)It puts the company in a more flexible pricing position.
C)It helps the company build market share quickly.
D)It decreases economies of scale, allowing for increased production costs per run.
E)It makes it easier for the firm to lower prices in the future.

Question

Quizplus · Accepted Answer

Penetration pricing allows a company to set a low initial price for its product or service to quickly gain market share. This can be an advantage for companies looking to enter a market with already established competitors. By attracting a large customer base quickly, the company can establish itself as a credible player in the market. As a result, it has a greater chance of becoming a market leader and ultimately increasing profits.

Which of the Following Is an Advantage of Utilizing Penetration