What is Penetration pricing?
Penetration pricing: Launching at a low price to win market share quickly.
Where Penetration pricing fits
Penetration pricing is part of Positioning & Pricing in Marketing. Positioning is the place your offer holds in the customer's mind. Segment the market, craft a value proposition, then price to match: skimming, penetration or competitive.
Practical tip
Pick a segment, state your unique value, then set the price.
Related terms
- Value proposition
- Why a customer should choose your product.
- Market segmentation
- Splitting customers into groups with similar needs.
- Price skimming
- Launching at a high price, then lowering it.
- Competitive pricing
- Setting prices based on rivals' prices.
- Unique selling proposition
- The thing that makes an offer different.
Formulas you will use with it
Test yourself
Which term means: “Launching at a low price to win market share quickly.”?
Price skimming · Value proposition · Penetration pricing
Answer: Penetration pricing
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