A business launches a product at a low price to quickly gain market share and then gradually raises the price. This pricing strategy is known as penetration pricing. Which stage of the product life cycle is this strategy most closely associated with?

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Question

A business launches a product at a low price to quickly gain market share and then gradually raises the price. This pricing strategy is known as penetration pricing. Which stage of the product life cycle is this strategy most closely associated with?

Accepted Answer

Introduction stage — Penetration pricing is used at the introduction stage to attract customers quickly and build market share for a newly launched product. The maturity stage (A) typically involves competitive pricing adjustments. The decline stage (B) may involve price reductions but for different strategic reasons. The growth stage (D) follows the introduction stage once the product has already gained initial traction.

Answer

Growth stage

Answer

Decline stage

Answer

Maturity stage

Answer

Introduction stage

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