Enterprise Marketing — Entrepreneurship STD 12 Commerce — Question

Penetrating pricing is the method of pricing in which the entrepreneur introduces its product in the market with low price compared to competitors. The low price increases the sale of the product tremendously. Normally for keeping low price, the profit margin is normally kept very low. The product thus captures the major part of the market e.g. Hero Honda, CD Dawn motorbike was introduced with the same pricing method. The CD Dawn penetrated into the market and captured major part of the market. Recently Bajaj CT-100 also followed the tactics. Wheel active detergent powder kept the price of Rs. 20 per half kilogram. This also captured the market quickly.