In this episode of Pricing College – Aidan and Joanna discuss penetration pricing and whether it is a smart way to grow a business – or could it create problems down the line?

TIME-STAMPED SHOW NOTES:

[00:40] Joanna explains that new entrants can favour this tactic.
[01:00] Aidan says we may focus on a low price to win market share.
[01:50] Some companies need to hit a break even volume – and penetration pricing can help them.
[02:30] Not everyone buys on price – many buy on value.
[02:50] Is it a tester – or intro concept to win more market share.
[03:20] Joanna says it can be very difficult to increase prices once customers have had low prices.
[04:30] Some new entrants have been able to enter a market at a higher price.
[05:40] Are people actually bored of existing products and so shopping around.
[06:20] Purchasing can be a habit
[07:15] Always ask what is the strategy – is it simply market share?
[08:50] Always ask what is the strategy – is it simply market share?

LINKS MENTIONED IN TODAY’S EPISODE:

Harvest Snaps

Penetration Pricing