Market Penetration Pricing Strategy Law and Legal Definition

Market Penetration Pricing Strategy is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers. The strategy works on the expectation that customers will switch to the new brand because of the lower price. Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume, rather than to make profit in the short term. If near term income is not critical and rapid market penetration for eventual market control is desired, then you set your prices very low.