A penetration pricing policy is most likely to be effective when




A penetration pricing policy is most likely to be effective when customers interpret the high price as signifying high qualit

Answer

Answer : Unit production and marketing costs fall dramatically as production volumes increase.

Penetration pricing is a pricing strategy where the price of a product initially set low to rapidly reach a wide fraction of the market and initiate word of mouth. This strategy works on the expectation that customers will switch to the new brand because of the lower price. And this strategy is most likely to be effective when unit production and marketing costs fall dramatically as production volumes increase.

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