market penetration

Strategy for entering a new market by adopting aggressive pricing. Goods are priced at a very low, gross profit margin, relying on high turnover to cover overheads. The aim is to penetrate the market with the new product and quickly to capture a large market share. After market penetration is achieved, prices can be raised if there is sufficient brand loyalty. However, there is a risk that low prices may be permanently associated with the product by consumers.