Penetration Pricing
Launching at a deliberately low price to win market share fast, planning to raise prices or monetize later once you have scale or lock-in.
Why it matters
Penetration pricing can seed a market and build a base quickly, useful where network effects or switching costs reward being first and biggest. The risk is training customers to expect cheap and never being able to raise prices.
For example
A new streaming service launches at 199 a month, far below rivals, to grab subscribers fast, planning to raise prices once it has scale.
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Related terms
Also in Starting Up
See how founders actually handle this on Growing and marketing, part of the Starting Up hub.
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