LECTURE #22

TOPIC
PENETRATION
PRICING
Penetration Pricing
Setting a Relatively Low
Initial Entry Price
Advantages of Penetration
Pricing
• Fast Diffusion and
Adoption

• Create Goodwill
• Creates Cost Control

• Discourages the Entry of

Competitors
• Important Enthusiasm
• Price Penetration is most
Appropriate When :
• Highly price elastic

• Economies of Scale
• Suitable for a Mass
Market

• Product will Face Stiff

Competition
LOSS LEADER
Sold Below Cost
Sales of other items in the
same visit
Price War
Intense Competitive
Rivalry