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. This is an example of the _____ pricing strategy.
A) skimming
B) penetration
C) competitive
D) leader

Question

Quizplus · Accepted Answer

Penetration pricing strategy involves setting a lower price for a new product to attract customers from competitors and 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