Penetration pricing is a marketing strategy in which a company sets a lower price for its products or services initially to quickly gain market share or penetrate a new market. The objective is to attract customers and build brand awareness by offering products at a lower price compared to competitors. This pricing strategy aims to stimulate initial demand and encourage customers to switch from existing competing brands. Once the market share is established, the company may gradually increase prices to generate higher profits. Penetration pricing is often used in industries with high competition or in the launch of new products.
