![]() Penetration pricing techniques can help an airline company persuade customers to do business with them rather than with their competitors. Many airline companies rely on the holiday season for the majority of their revenue, which means there's a lot of competition during a short period of time. This promotion leads to the new hotel business increasing revenue by £200,000 within a year and doubling its returning customer base. ![]() To encourage customers to book a room with them instead of other competitors, the company advertises a reduced cost for the best en-suite room if it's your first booking with the hotel. Penetration pricing can also introduce customers to other services such as restaurants or networking events that a business might have on its premises.Įxample: A hotel and lodging business establishes multiple locations along a busy motorway that people can use to rest during long journeys. Businesses in the hospital industry, such as hotels, may have several locations, and acquiring customers that choose a particular brand in any location can be valuable. ![]() The hospitality industry is extremely competitive, therefore companies that try to establish themselves and acquire new customers often resort to various marketing techniques. Related: What is competitive pricing? A comprehensive guide Hospitality servicesĮstablishments in the hospitality industry use penetration pricing extremely frequently for promotional events and limited-time discounts. The following year, 75% of its subscribers re-subscribed for another annual plan. The company gained 10,000 new customers during this promotional period and ultimately increased annual revenue by 15%. To compete with existing major ISP corporations, the new company decides to offer a free installation service to customers for a promotional period of three months. This marketing technique, partnered with high-quality service, means an ISP can acquire and keep new customers to establish itself in the market.Įxample: A new Internet service provider wants to enter the market and introduce fibre-optic Internet into rural houses across the country. Internet service providers (ISPs) may offer customers a significantly reduced price or introduce various extra packages for free during a limited period of time to allow customers to preview the service. Internet providers use penetration pricing techniques to entice customers as there's heavy competition among a few major corporations in the industry. Related: What is psychological pricing? (With 10 strategies) Internet providers As a result, the new streaming platform becomes renowned among subscribers as the go-to platform for niche shows and movies and doubles its subscriber count. To compete with the other large streaming platforms, the new one offers a free trial period of three months after the initial sign up and £7.99 a month after that. For a streaming platform to make the most out of this strategy, it would need quality content that resonates well with the customers.Įxample: A new streaming platform offers customers a variety of niche television shows and movies. ![]() This trial allows customers to preview what type of content the streaming platform has and if the platform is right for the customer. Since the streaming industry has many high-level competitors with significant capital and resources, it can be difficult for new entrants to establish a market share. ![]() The streaming industry uses penetration pricing techniques regularly by offering customers a free trial period or a heavy discount. Here are seven examples in different industries to give you a reference of how businesses use this technique and if it may be appropriate for you to use in a business: Streaming platforms Penetration pricing examples can help you to understand that while penetration pricing can be an effective marketing technique, certain situations benefit from it more than others. ![]()
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