Which of the following is a characteristic of penetration pricing?

Penetration pricing is a strategy used by companies to attract customers to a new product or service by setting a low initial price. The primary goal of this approach is to quickly gain market share and establish a foothold in a competitive marketplace. By offering lower prices, companies can entice price-sensitive customers and encourage them to try the product, thereby increasing overall sales volume and potentially paving the way for future price increases once a sufficient customer base is established.

This pricing strategy contrasts with others that may focus on recouping development costs through high initial prices or setting prices based on perceived value, where the emphasis is on customer perceptions rather than competitive positioning. Additionally, adjusting prices based on seasonal demand reflects a different strategy centered on market fluctuation rather than gaining immediate market entry.