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Question
What is penetrating pricing?
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Solution
This strategy involves setting a low price in the initial stage so as to make the brand quickly popular and to maximise the market share. The manufacturer seeks to sell to the masses. Many firms use this strategy while launching fast moving consumer products. The policy results in high sales volume during the initial stages of a product's life cycle. Some retailers use this strategy by operating on the principle of low markup and higher volume. Penetrating pricing is an aggressive pricing strategy and it may be used to restrict the entry of new firms in the industry.
RELATED QUESTIONS
Which pricing strategy involves charging according to their competitors?
The strategy of introducing new product in existing market is classified as ______.
______ price refers to the high initial price charged when a new product is introduced in the market.
Under this Pricing Strategy, a business firm adjusts its own price policy in accordance with general pricing structure in the industry.
Selling price = Total cost per unit + Desired profit per unit is the formula to fix prices under which Pricing Strategy?
______ determines the sales volume and the profit margins.
In a competitive market, parity pricing is the appropriate strategy. Justify either for or against.
What is Cost plus pricing policy?
What are the conditions under which parity pricing is desirable?
| Evergreen Cosmetics is planning to launch a new range of 'anti-wrinkle creams' in the Indian market. They conducted a market survey and found potential competition from Remain Young. Since they are targeting the higher strata of society, the cream is being priced much higher than their competitors. They plan to use the television as a media to advertise this anti-wrinkle cream as opposed to print media which is largely used by them for their other products. Officials at Evergreen Cosmetics feel that with the correct style of promotion, they could easily be successful in the market. |
- Identify and explain the pricing strategy that is being used by Evergreen Cosmetics.
- Describe any two qualities that a salesman selling this product should possess.
- Explain any two tools of sales promotion that can be used here.
