Question: 47.A penetration strategy tends to be effective in a price-sensitive market. Thus, one of the purposes of penetration pricing is to: a. recoup product development

47.A penetration strategy tends to be effective in a price-sensitive market.

47.A penetration strategy tends to be effective in a price-sensitive market. Thus, one of the purposes of penetration pricing is to: a. recoup product development costs quickly. b. discourage competitors from entering the market. c. produce a large margin of prot per unit. d. develop exclusive distribution. e. attract the price-insensitive buyer who demands the latest in technology. ANSWER: b RATIONALE: A low price will mean a low profit margin and will only be attractive if a large volume of business can be seized. The first company on the market that uses penetration pricing has a great advantage

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