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Question
Introducing a product at low price and increasing the price once the brand succeeds is known as ______ pricing.
Options
Penetration
Skimming
Going rate
None of these
Solution
Introducing a product at low price and increasing the price once the brand succeeds is known as Penetration pricing.
Explanation:
Penetration pricing is a strategy in which a product is introduced at a low price to attract customers and gain market share quickly. Once the product gains acceptance and a substantial customer base, the price is gradually increased. This approach helps establish the brand in the market and build customer loyalty before adjusting prices to a more profitable level.
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| Evergreen Cosmetics is planning to launch a new range of 'anti-wrinkle creams' in the Indian market. They conducted a market survey and found potential competition from Remain Young. Since they are targeting the higher strata of society, the cream is being priced much higher than their competitors. They plan to use the television as a media to advertise this anti-wrinkle cream as opposed to print media which is largely used by them for their other products. Officials at Evergreen Cosmetics feel that with the correct style of promotion, they could easily be successful in the market. |
- Identify and explain the pricing strategy that is being used by Evergreen Cosmetics.
- Describe any two qualities that a salesman selling this product should possess.
- Explain any two tools of sales promotion that can be used here.
What are various strategies used for pricing a product?
