Multiple Choice
In the price-setting process within competitive markets, after demand has been evaluated, the next step is to:
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3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
Which of the following scenarios best describes the marketing growth strategy known as market penetration in a competitive market?
A
A firm introduces a new product line to attract a different segment of customers.
B
A firm acquires a competitor to increase its market share.
C
A firm increases its sales of existing products to current customers by offering discounts.
D
A firm expands its operations into a new geographic region.
Verified step by step guidance1
Step 1: Understand the concept of market penetration. Market penetration is a growth strategy where a firm focuses on increasing sales of its existing products within its current market segments, without changing the product or targeting new customers.
Step 2: Identify key characteristics of market penetration: it involves selling more of the same product to the same customer base, often through tactics like discounts, promotions, or improved distribution.
Step 3: Analyze each scenario: introducing a new product line targets new customer segments (not market penetration), acquiring a competitor is a market consolidation strategy, and expanding into new geographic regions is market development.
Step 4: Recognize that the scenario where a firm increases sales of existing products to current customers by offering discounts aligns perfectly with market penetration, as it aims to boost sales within the existing market.
Step 5: Conclude that the best description of market penetration is the firm increasing sales of existing products to current customers by offering discounts.
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