Penetration Pricing

Penetration Pricing.
The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. This approach was used by France Telecom and Sky TV.
Economy Pricing.

Penetration pricing: setting prices low in order to gain as much market share as possible as quickly as possible.
Perception: the way in which individuals analyse and interpret incoming information and make sense of it.

Penetration pricing
Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share
Penetration strategy ...

market penetration pricing
an approach to pricing in which a manufacturer sets a relatively low price for a product in the introductory stage of its life cycle with the intention of building market share
market planning process ...

Note that "skimming" and penetration pricing involve tradeoffs. A clearly preferred strategy may not be obvious, and managers may need to engage in some serious consideration to arrive at a desired strategy. Both strategies involve some level of risk.

Late-to-market competitors may use a penetration pricing approach to establish a position in the market. Penetration pricing intentionally sets a price that is below long-term pricing in order to capture large share of market.

Penetration pricing: A pricing strategy where the organisation sets a low price to increase sales and market share.
Perceptual map: Mapping a product/organisation alongside all competitors in the hope to find a ' positioning gap' in the given market.

See also: Pricing, Price, Market, Strategy, Customer