Question

What pricing strategy will be used to launch shampoo?

Answer 1

Penetrating pricing

Shampoo is a widely used Fast Moving Consumer Good (FMCG). Penetrating pricing is acceptable for this product.

This technique involves setting a low initial price so that the brand quickly gains popularity and market share. Shampoo demand is very elastic, which means that lowering the price can significantly increase demand. There is also strong competition in the shampoo business, so a cheap starting price helps to limit the entry of new companies and obtain widespread adoption. For example, shampoo sachets are sold at extremely low prices in order to target the rural and middle-class markets.