Which of the following best describes the target of penetration pricing?

Penetration pricing is a strategy used primarily to gain market share quickly by setting the price of a product lower than competitors. This approach is effective in attracting a larger customer base and encouraging product trial. By offering a lower initial price, businesses can create buzz and stimulate demand, which can lead to increased brand loyalty over time as customers become accustomed to the brand and its offerings.

This strategy does not focus on establishing a premium market position, as a low penetration price typically suggests a value offering rather than a high-end luxury position. It also does not aim to maximize short-term revenue, since the initial low price can lead to lower profits initially. Although it may indirectly reduce competition by gaining a significant share of the market, that is not the primary goal of penetration pricing. Instead, the fundamental purpose is to foster rapid customer adoption and encourage repeat purchases, thereby building brand loyalty.