A business intent on following the penetration pricing strategy should have substantial financial resources, since it may incur significant losses during the early stages of this strategy. Views Read Edit View history. With no evidence to suggest this trend will change, marketing budgets are expected to remain consistent with levels or increase. The brand was a direct competitor to the well-established Pringles line of chips. Predatory pricing, also known as aggressive pricing also known as "undercutting" , intended to drive out competitors from a market. Predatory Pricing and Recoupment. Process — Marketing Mix.
We believe pricing deserves a true home, one with a dedicated, cross-functional decision-making body supported by an A-grade general manager. Definition Penetration pricing is the practice of setting an initial price much lower than the eventual standard price. Finally, penetration pricing is limited to the growth and declining phases of the product because implementation during the introductory or mature phases of the cycle will lead to a cycle of competition driving prices continually lower and causing a drop in profits. For example a razor manufacturer will charge a low price for the first plastic razor and recoup its margin and more from the sale of the blades that fit the razor. They know pricing can be used to increase penetration defined as the percentage of households in a market buying a particular brand in a given year. When you start your business, you have to penetrate the market and compete with established players.
Pricing for Penetration - Bain & Company
Tim Friesner Marketing Teacher designs and delivers online marketing courses, training and resources for marketing learners, teachers and professionals. Penetration Pricing Joern Meissner: Lesson Exercise Answer In terms of the marketing mix some would say that pricing is the least attractive element. The answer always involves three tactics:
Pricing for Penetration
Description: A pricing strategy is mostly influenced by your requirement for net income and your objectives for long term market control. The novelty of consumers wanting to have the latest trends is a challenge for marketers as they are having to entertain their consumers. There are many strategies for advertising an offering. The strength of production manager including experience with personnel management, current and new technologies, complex projects and the equipment and tools used by the manufacturing personnel.