Question

Pentogreen, a company that manufactures soda, offers its latest products at very low prices. Pentogreen's strategy is based on the assumption that more customers will be willing to buy its products if they're offered at lower prices. Pentogreen has adopted this strategy to attract a larger customer base and increase its sales volume even though it will only gain a small profit on each individual sale. In this scenario, Pentogreen has implemented the _____ strategy.

Answer 1

The correct answer is penetration pricing.

Step-by-step explanation:

It is one of the pricing strategies that the company can follow when deciding to introduce a new product in the market. It consists of setting a low price at the time of product launch, in order to stimulate sales and quickly gain market share.

This strategy requires a great effort in distribution and promotion, in order to achieve market dominance that facilitates obtaining long-term benefits.

It is, for example, the strategy that the newspaper La Razón used at the time of its launch. It was sold for a time at a lower price than usual in this category of products, in order to make it known among consumers. Subsequently, its price was equal to that of other newspapers.