A company which charges a lower price than may be indicated by economic analysis to gain a foothold in the market is practicing
A)price skimming.
B)psychological pricing.
C)penetration pricing.
D)prestige pricing.

Question

Quizplus · Accepted Answer

Penetration pricing is a pricing strategy in which a company charges a lower price than may be indicated by economic analysis to gain a foothold in the market. The goal of penetration pricing is to attract customers and gain market share, which can then be leveraged to increase prices in the future. This strategy is often used by companies that are entering a new market or competing against established brands. Price skimming (A) is a strategy in which a company sets a high price for a new product or service and then gradually lowers the price over time. Psychological pricing (B) is a strategy that uses price to create a perception of value or to influence consumer behavior. Prestige pricing (D) is a strategy in which a company sets a high price to convey a sense of luxury or exclusivity.

A Company Which Charges a Lower Price Than May Be