Penetration pricing Is a marketing strategy used by all types of businesses to attract customers or clients to a new product or service by offering a discounted price for a limited period of time. The reduced price is intended to help the new product or service penetrate the market and attract customers. It is a means of making the market aware of the new product or service and encouraging consumers to try what is being offered. Examples include: (1) a discounted price such as 20% off for a limited period oftime, (2) a free introductory month, or (3) buy one, get one free.
Penetration pricing is used by large established companies as well as small companies.