Which pricing strategy would likely use lower prices to gain fast market share?

• A. Market penetration
• B. EDLP
• C. High/Low
• D. Price discrimination

Answer: (A)

Market penetration pricing lowers the entry price on purpose to attract a large number of buyers quickly. By offering a cheaper option, price-sensitive customers try the product, driving fast sales growth and expanding market share. The higher volume helps spread fixed costs over more units, improving efficiency and potentially pushing competitors out as the market becomes more price-focused. This approach is especially useful when a company wants rapid visibility and adoption in a competitive space and is confident it can sustain lower margins long enough to reap scale benefits.

Other strategies don’t aim for that same rapid share gain: EDLP focuses on consistently low prices rather than a deliberate initial push for market dominance; High/Low uses periodic promotions and price fluctuations rather than immediate, broad adoption; price discrimination charges different prices to different customers to optimize profits, not to win market share quickly.