The basic objective of a penetration pricing policy is to:
A)recover start-up costs as quickly as possible.
B)transform the small firm into a discount outlet.
C)gain quick access into a market to realize high sales volume quickly.
D)discourage competition and gradually become a high volume producer.

Question

Quizplus · Accepted Answer

The objective of a penetration pricing policy is to gain quick access into a market to realize high sales volume quickly. This is achieved by setting a low price initially to attract customers and establish a foothold in the market. The hope is that as sales volume increases, the company can eventually raise prices and generate profits.

The Basic Objective of a Penetration Pricing Policy Is To