What marketing strategy involves setting the price of a new food product below that of competitors to gain market entry?

The correct answer is penetration pricing, which is a marketing strategy that sets the price of a new food product below that of competitors. This approach is designed to attract customers who may be hesitant to try a new product, making it more appealing due to its lower cost compared to established brands. By offering a product at a more affordable price point, companies can swiftly increase their market share and encourage initial trial among consumers.

Penetration pricing is particularly effective in markets where consumers are price-sensitive or when the goal is to achieve rapid growth in a competitive landscape. By establishing a foothold early, businesses can create brand loyalty and eventually capitalize on this initial interest through additional sales or adjusted pricing strategies once the product gains recognition.

In contrast, premium pricing involves setting a high price in order to convey quality or exclusivity, which does not align with the strategy of attracting customers with lower prices. Competitive pricing refers to setting a product's price in line with competitors, rather than below them, and skimming pricing focuses on setting high initial prices to attract consumers willing to pay a premium, which is also not suitable for gaining quick market entry.