Question

In markets where customers are sensitive to price and where internal efficiencies lead to cost advantages allowing for acceptable margins even with aggressive pricing, a ________ strategy can create a powerful barrier to market entry for other firms.

Answer 1

The correct answer is letter "A": Penetration.

Step-by-step explanation:

Penetration Pricing means that an initially low price for a new product or service attracts customers away from the competitors. The new company hopes that even if prices rise to normal levels, customers will continue to use their products. Penetration Pricing will yield higher returns on sales and push rivals out of the market if implemented long enough.