penetration pricing

Meanings

1. 1noununcountablebusiness

   A pricing strategy in which a company sets a low initial price to attract customers quickly and gain market share.

   Grammar: Uncountable; used with the, and takes a singular verb: Penetration pricing is common in tech.

   Patterns

   • use penetration pricing
   • adopt penetration pricing
   • penetration pricing strategy

   The startup used penetration pricing to win users before raising its fees.

   Penetration pricing helped the new streaming service compete with established rivals.

   Analysts warned that penetration pricing can hurt profits if costs stay high.

2. 2noununcountablebusiness

   The practice of entering a market by offering goods or services at unusually low prices for a limited period.

   Grammar: Often followed by in or into: penetration pricing in the smartphone market.

   Patterns

   • penetration pricing in a market
   • penetration pricing into a region

   Their penetration pricing in Southeast Asia brought millions of first-time buyers.

   The airline's penetration pricing into smaller cities surprised competitors.

3. 3noununcountablebusiness

   A marketing approach that sacrifices short-term profit in order to build a large customer base.

   Grammar: Used to describe the overall approach, not one price: Penetration pricing is a long-term bet.

   Patterns

   • a penetration pricing approach
   • penetration pricing model

   The company's penetration pricing approach delayed profits but built loyalty.

   Investors questioned whether the penetration pricing model was sustainable.

Common combinations

penetration pricing strategy

Their penetration pricing strategy cut the average price by half.

use penetration pricing

Many app developers use penetration pricing when they launch.

adopt penetration pricing

The board decided to adopt penetration pricing for the new brand.

penetration pricing model

The penetration pricing model works best when demand is price-sensitive.

switch from penetration pricing

After two years, they switched from penetration pricing to premium pricing.

Synonyms and how they differ

loss-leader pricing

Similar in setting low prices, but loss-leader pricing refers to selling one item cheaply to attract buyers for other products.

price skimming

The opposite strategy: starting with a high price and lowering it later, so it is not a synonym.

Opposites

Word family

penetrate verb

To enter or spread into a market or group.

penetration noun

The act of entering or reaching deeply into a market.

Commonly confused: penetration pricing or predatory pricing?

Practice

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Write a sentence using “penetration pricing”, then check it and compare it with the examples above.

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