Which pricing strategy is characterized by setting low prices to attract customers and gain market share rapidly?

The pricing strategy characterized by setting low prices to attract customers and gain market share rapidly is market penetration pricing. This approach is typically employed by businesses that are entering a new market or launching a new product. By setting initial prices lower than the competition, the goal is to entice customers to try the product, thereby increasing sales volume quickly.

This strategy is effective in creating quick brand awareness and can lead to a larger customer base in a short period. It also serves to discourage potential competitors from entering the market, as lower prices may make it difficult for them to establish a foothold. Over time, as the business secures a solid position in the market and builds customer loyalty, it may gradually increase prices.

In contrast, value pricing focuses on delivering good value to customers at a fair price, price skimming involves setting high prices initially and lowering them over time to recover costs, and premium pricing entails setting prices higher than competitors to reflect an exclusive or superior offering. Each of these strategies serves different objectives and markets, distinguishing them from market penetration pricing's primary aim of rapid growth through low pricing.