Question

Explain one of the pricing strategies, using an example. Assess the strategy in terms of market ethics.

Answer 1

Pricing strategy is a way of finding a competitive price of a product or a service. This strategy is combined with the other marketing strategies that are the 4P strategy (products, price, place and promotion) economic patterns, competition, market demand and finally product characteristic.

One of the Pricing strategy is Penetration Pricing .Penetration pricing is an e-commerce marketing strategy business use when they’re highlighting a new product or service or wish to enter a new market.

It works in a simple way, where they set their prices lower than their competitors in the hope to increase their market share of customers. Usually, this practice only happens during the initial offering and is meant to allure customers to their store, as opposed to their competitors.Penetration pricing is not a long term pricing strategy and you should find other pricing strategies that work for your business in the long run. It should only be used when a product is in the introductory stage of its life cycle.

For example - Mi corporation is the mobile company that sells the lower price mobile phones with best features in India and have captured about 40 percent of Indian market by Penetrating prices .