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The goal is to generate demand, rapidly build a customer base, and maximize brand loyalty in a short time.

How does a penetration pricing strategy work?Ī penetration pricing strategy prioritizes market share over profits for a given time period. We’ll explain how it’s different from similar pricing tactics, provide examples, and cover the advantages and disadvantages of penetration pricing. Learn the ins and outs of using a penetration pricing strategy. Many high-profile startups have used this strategy to disrupt industries and become today’s market leaders. A penetration pricing strategy is built on this concept.īy entering the market with a low price, businesses aim to attract customers quickly-then gradually raise their price.

For many consumers, nothing makes their buying decision easier than price. New businesses rely on clear and powerful differentiators to stand out from the competition.