Question

Rupali intends to start an enterprise that will produce healthy alternatives for chocolates and sugar cravings. In order to assess the taste preferences of people and possible options for flavours she conducted an online survey. Based on the information collected she analysed the market and decided to launch coconut, jaggery and sesame based chocolates under the brand name 'Coco Demerara'. She decided to fix the price of chocolates at a relatively lower level in the beginning and later on as the demand picks up she may revise the price.

1. Identify the pricing strategy used by Rupali for her chocolates.
2. State the marketing objective of the pricing strategy opted by Rupali.
3. Mention any two advantages of the pricing strategy to the firm, identified in part (a) above.

Answer 1

1. The pricing method Rupali used for her chocolates is known as penetration pricing. With this method, you can quickly increase your market share by starting with a low price to attract 10 clients.
2. The penetration pricing strategy's marketing goal is to:
   Increase Market Share: Rupali hopes to draw in a lot more clients and establish an established client base by lowering prices. and build her reputation in the marketplace.
3. 1. Rapid Customer Acquisition: Price-conscious consumers are drawn to the product and encouraged to try the new chocolates because of its reduced cost. This facilitates the rapid development of a client and the production of initial sales volume.
   2. Market Penetration and Brand Recognition: Rupali may swiftly enter the market and raise brand awareness by providing chocolates at a reduced cost. Positive word-of-mouth can increase brand identification and loyalty as more consumers test and like the product. promoting success and long-term growth.