Tuesday, January 19, 2010

Penetration Pricing Strategy:
From a strategic perspective,A market share focused penetration strategy is most appropriate when it is important to exploit a potentially transient first mover advantage, or to quickly establish a broad installed base in anticipation of:
(a) Cost improvements from scale, scope or experience (learning curve)
(b) Substantial complementary product sales (e.g. razors and blades, toner cartridges for printers and copiers)
(c) Subsequent upgrade cycles (software)
(d) Network effects that provide increasing benefits as more customers buy the product (e.g. fax machines)

posted by Abd ur Rehman