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State the Penetration pricing
As opposed to the skimming pricing the objective of penetration pricing is to gain a foothold in a highly competitive market. The objective of this pricing method is market share or market penetration. Here the firm prices its product lower than the others do in competition. This method delivers results in the following situation:
When the size of the market is large and it is a growing market.
When customer loyalty is not high customers have been buying the existing brands more because of habit rather than any specific preferences for it.
When the market is characterized by intensive competition,
When the firm uses it as an entry strategy,
Where price quality association is weak.
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