DECA Sports and Entertainment Marketing Practice Exam

What pricing strategy is utilized to capture a large market share early on?

1. Low Pricing

2. High Pricing

3. Competitive Pricing

4. Price Skimming

The correct answer is: Low Pricing

The pricing strategy utilized to capture a large market share early on is low pricing. This approach involves setting prices at a lower level than competitors to attract customers and encourage initial purchases. By lowering prices, a business can effectively increase its customer base rapidly, making it more appealing for cost-sensitive consumers who are looking for deals or value. This strategy is particularly useful in highly competitive markets where gaining market share is crucial for establishing brand presence and driving sales volume. The low pricing strategy can also create a perceived value, encouraging trial and adoption of products, which sets the foundation for building customer loyalty and long-term profitability once a solid market position is established. In contrast, high pricing tends to target premium customers, competitive pricing focuses on matching competitors’ prices, and price skimming involves setting high initial prices intended for early adopters before gradually lowering them over time. Each of these strategies serves different market goals and customer segments, making them less effective than low pricing in rapidly acquiring a large share of the market early on.