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What kind of pricing strategy a firm should normally follow for marketing electronic goods?
- a)Penetration pricing strategy
- b)Skimming pricing strategy
- c)Cost plus pricing strategy
- d)All of the above
Correct answer is option 'A'. Can you explain this answer?
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What kind of pricing strategy a firm should normally follow for market...
Penetration Pricing Strategy for Marketing Electronic Goods
Penetration pricing strategy is the most suitable pricing strategy for marketing electronic goods. This strategy involves setting a low initial price to attract customers and gain market share quickly. Here's why a firm should follow this strategy:
1. Attracting Customers
By setting a low price for electronic goods, the firm can attract price-sensitive customers who are looking for a good deal. This can help in building a customer base and increasing sales volume.
2. Competitive Advantage
In the highly competitive electronics market, using penetration pricing can give the firm a competitive advantage. It allows the firm to enter the market with a strong position and gain market share from competitors.
3. Market Expansion
Penetration pricing strategy can also help in expanding the market for electronic goods. Lower prices can attract new customers who may not have been able to afford the products at a higher price point.
4. Building Brand Loyalty
By offering electronic goods at a lower price initially, the firm can build brand loyalty among customers. If the quality of the products is good, customers are more likely to become repeat buyers even when prices increase in the future.
In conclusion, penetration pricing strategy is the most effective pricing strategy for marketing electronic goods as it helps in attracting customers, gaining a competitive advantage, expanding the market, and building brand loyalty.
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What kind of pricing strategy a firm should normally follow for market...
For marketing electronic goods, a firm normally follows penetration pricing strategy. Penetration price is known as charging lowest price for the new product. This aims to foster sales, capture market share, utilise full capacity and economies of scale in productive process and keep the competitors away from the market.
Penetration price policy can be adopted in the following circumstances:
(i) There is very high price elasticity of demand.
(ii) There are substantial cost savings due to enhanced production process.
(iii) By nature, the product is acceptable to the mass of consumers.
(iv) There is no strong patent protection.
(ii) There are substantial cost savings due to enhanced production process.
(iii) By nature, the product is acceptable to the mass of consumers.
(iv) There is no strong patent protection.
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What kind of pricing strategy a firm should normally follow for marketing electronic goods?a)Penetration pricing strategyb)Skimming pricing strategyc)Cost plus pricing strategyd)All of the aboveCorrect answer is option 'A'. Can you explain this answer?
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