![]() Case study for Penetration pricing with example of brand Mokai – A cider brand Not every brand with penetration pricing succeeds, but not every brand fails with it. Thus, we can see that penetration pricing has its own success and failure ratio. When you have an offer on an international tour, when you get huge discounts on calling rates, or when the airlines turn cheap for a month, you will see the maximum sales happening. Some industries like telecom, airlines, tourism etc are the best examples of industries where competition is very high and penetrative pricing works miracles. ![]() ![]() However, even though the company might have to stay on it toes to apply the penetration strategy, if the strategy is applied correctly, it can be a very successful marketing strategy. The customer might leave your brand altogether, if another competitor is consistently offering the same quality of product at lower prices. Thus, if you are not able to meet margins, and if you increase prices, the customer might switch again. The low initial price has created an expectation of permanently low prices amongst consumers. Then, after one month, the prices rise, more or less equivalent with the others. According to your budget, you will probably chose the cheapest one. This is an inherent nature of the penetration strategy, where you yourself are breaking the customer from another brand and attracting him to your brand.Ĭonsider having 10 kinds of cheese, very similar in quality. A drawback of price penetration depends on the kind of customers you are targeting and whether you are looking for brand loyalty in your customers? The penetration pricing might attract the wrong kind of customers, who are more interested in the cheap price focusing on the bargain, rather than the ones who will become loyal to your brand. ![]()
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