Penetration Pricing


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Penetration Pricing

The practice of undercutting competitors' prices in order to establish and gain market share. Penetration pricing is most common when a company is introducing a new product in an already saturated market. It may result in losses early on, but is intended to build brand loyalty for when it raises prices later.
References in periodicals archive ?
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.
* Penetration pricing, which is the practicing of "lowballing" just to win OEM business.
Students of business know this respectively as competitive pricing (on par with competitors), skimming pricing (higher) or penetration pricing (lower).
In other cases, a few banks are getting active on the mortgage side through a small portfolio and are trying to build up by appealing to customers through "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.
Managed care market share through low, penetration pricing? How will you promote the program?