Sjcam used a penetration pricing strategy to introduce its Legend action camera to compete with the latest GoPro offering. Which of the following conditions would argue for using a penetration pricing strategy when introducing this new camera?

a. A large potential market exists, even at a high price.

b. Technological problems still exist for competitors, prohibiting their entry into the market for at least six months.

c. Increasing volume substantially reduces production costs.

d. Consumers perceive a price-quality relationship.

e. The product relatively prices insensitive (price inelastic).

Question

Gia Gaines

Business

15 April, 18:49

Sjcam used a penetration pricing strategy to introduce its Legend action camera to compete with the latest GoPro offering. Which of the following conditions would argue for using a penetration pricing strategy when introducing this new camera?

a. A large potential market exists, even at a high price.

b. Technological problems still exist for competitors, prohibiting their entry into the market for at least six months.

c. Increasing volume substantially reduces production costs.

d. Consumers perceive a price-quality relationship.

e. The product relatively prices insensitive (price inelastic).

+3

Answers (1)

Know the Answer?

Rodolfo Rhodes · Answer 1

Answer: c. Increasing volume substantially reduces production costs.

Explanation:

Sjcam's ability to increase the the volume substantially reduces production cost and gives them the ability to compete.