Advantages:
1. The high sales volume results in falling costs, allowing the company to cut its price even further.
2. May be useful to break-even or to achieve economies of scale in production and marketing terms
3. It denies competition a volume share within the segment by reducing the attractiveness of the market entry to competitors
4. Ideal for elastic demand situations where price is critical factor for the buyer
Disadvantages:
1. May create poor quality brand image/perceptions that will be difficult to change later
2. It may be difficult to change prices later if the strategy does not work out
Lellah answered the question on November 8, 2021 at 04:56
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