What is penetration pricing?

Penetration pricing is a pricing strategy where a company sets a low price for a new product or service with the aim of quickly attracting a large number of customers and gaining a significant market share.

Main features:

• Low initial price to stimulate demand.
• Rapid expansion of the customer base.
• The possibility of raising the price after establishing a presence in the market.

Example: a new online service might offer a subscription at a very low price or even free for the first few months to attract users, then gradually increase the cost.