A pricing strategy involving setting a relatively low price for a product during the introductory stage of its life-cycle to gain a share of the market which can be built upon.This strategy is frequently used when businesses want to enter a new market or acquire a relatively small market share. An effective penetration pricing strategy can result in large sales or market shares and subsequently lower costs per unit. Penetration strategies are frequently used by companies that need to exhaust their spare resources.

See also:
Marketing strategyMarket penetration strategy
Market penetration