The pricing of a new product at a low initial price to build market share quickly is called:
A)Target costing
B)Predatory pricing
C)Price skimming
D)Penetration pricing

Question

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Penetration pricing is when a company sets a low initial price for a new product in order to quickly gain a large share of the market. This can help the company establish itself as a major player in the market and create a loyal customer base. Predatory pricing, on the other hand, is when a company sets prices so low that it drives competitors out of the market, and then raises prices once the competition is gone. Target costing is a method of pricing based on the estimated cost of producing a product and the price that customers are willing to pay for it. Price skimming is when a company sets a high initial price for a new product, with the intention of gradually lowering it over time as competitors enter the market.

The Pricing of a New Product at a Low Initial