Question

In a bid to attract more customers in a market that has several competitors, Barrymore's Bakery slashed the prices of all its products by 50 percent. Managers at the firm reasoned that lower prices would draw in even more customers, making up for the reduction in price several times over. Which of the following pricing strategies are they using?
a. Market-skimming pricing
b. Market-penetration pricing
c. Captive-product pricing
d. Cash discount pricing
e. By-product pricing

Answer 1

Answer: Market-penetration pricing

Explanation:

Market-penetration pricing is a type of price setting method where a sales company reduces the prices of it's products to attract customers to it's products.

Barrymore's Bakery is applying penetration pricing method by introducing a 50% discount on all of it's products to draw customers to its products in a market filled with so many competitors.