It is a scheme used when in the market there is such an adequate number of products that for your product life you have to manage on low earnings.For the products upon which consumers decide upon the basis of price differentiation that what to adopt and what product to skip.It is for the price elastic demand products the products for which there is a direct relation with the price and consumer value their money by charging low prices by modifying the price for the same product.It is adopted by the marketers for products about which consumers are price conscious and can control the market on basis of price.It is also adopted when there is a large number of alternative brands available for the same product to fulfill the need of the consumers so to attain its required space can use such pricing strategy.The penetration pricing approach is used to attain consumer attraction when market saturation condition is at its fullest.The conditions in which this strategy is mostly adopted are: This is mostly implemented when the company has to undergo basic requirements of life. Along with using a skimming strategy they also adopt a penetration pricing strategy for some of their products like for LIFEBUOY SHAMPOO AND SOAP. So it is applied by latecomers or newcomers to gain their position in the market.Ī big example of the companies adopting a penetration pricing strategy is UNILEVER. Although usually, it is for normal consumable products like shampoo, a soap about which consumers are not brand conscious and can switch by observing fluctuation in price. This price penetration strategy can be adopted by a local surf brand by keeping its price low to already existing brands in the market. Most of the time this appeal is used by the manufacturers who enter the market late, so this strategy is adopted by the latecomers to compete with baby boomers and already existing competitors. This pricing strategy is usually adopted by local product producers and for local brands and is for the new entrants to endorse products by keeping the initial prices at a fairly low rate to attract the consumers. Applying this tactic you have to make a huge promotion of the qualities of your new product so that it can gain its place among competitors.
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