What do we call it when a seller sets a low introductory price to win customers, or to discourage competitors owing to the low margins achievable in the marketplace? Choose one.
The seller tries to penetrate the market, to build market share, depriving competitors of those sales, and hoping to retain the customers for future sales. This is penetration pricing.
'Cost mark-up' would be based on cost - add a certain amount to create the selling price. For exam-ple, in UK clothing retail often simply 100% added to the cost of the goods - simple, fast and hope-fully sufficient to coverall costs, as well to enable the goods to sell. This approach hinges on effec-tive buying, at the right cost.
Promotional pricing is a temporary price drop to encourage purchases of a particular product or range.
Competitive pricing would simply mean pricing at around the market level - monitoring market and competitor prices.
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