Penetration Pricing – How does Penetration Pricing Work and When to use it?

Fish swimming towards a hook with a 'LOW PRICES' sign, illustrating penetration pricing strategy.

Some companies will swoop into a market with radically low prices as a strategy for attracting new clients. This is called a penetration pricing strategy. We’ll explore what penetration pricing is, how it works, how it compares to other pricing strategies, when it should be used and also look at some penetration pricing examples.