There are several reasons why a business might choose penetration pricing:
Market Entry: It helps new entrants overcome barriers to market entry by making their products more attractive than existing alternatives. Volume Sales: Lower prices can lead to higher sales volume, which can result in economies of scale and lower unit costs. Brand Loyalty: By attracting a large customer base early, companies can foster brand loyalty and repeat purchases. Competitive Advantage: It can be a way to disrupt competitors and capture market share quickly.