Question

Pranav is an entrepreneur producing LED lamps with brand name "Lavells". These lamps are in great demand. He finds that the cost of production per unit of lamp is 1600rs and he can sell the same at 2000rs per lamp. The competitors in the market are selling this type of lamp at the rate of 2400rs. Pranav's objective is not to earn profit in short run but to capture the largest market share. His expectation is that the customers will be attracted towards the new brand because of lower price. Identify the method of pricing adopted by Pranav to capture the substantial portion of the market.

• A. Cost plus pricing
• B. Penetration pricing
• C. Skimming pricing
• D. Variable pricing

Answer 1

The Correct Option is B

The correct answer is option (B) :

Penetration pricing