Top players are consolidating their market position by implementing strategies such as innovative product development, customer centricity, continuous technological development, expansion of product distribution channels, and penetration pricing
to maximise sales and increase profitability.
Students of business know this respectively as competitive pricing (on par with competitors), skimming pricing (higher) or penetration pricing
They also find important roles for beliefs on both the demand side, as consumers tend to pick the product they expect to win the standards war, and on the supply side, as firms engage in penetration pricing
to invest in growing their networks.
One good approach is penetration pricing
, or pricing a product below cost to increase sales.
In the US, price skimming is the most frequently used strategy in the medical device market, but market segmentation should be used to assess if other strategies, such as penetration pricing
, would be more apt in particular sectors.