Which pricing strategy sets prices very low to generate new sales even if profits suffer?

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Prepare for UCF MAR3023 Exam 4. Study effectively with quizzes and flashcards. Enhance understanding with multiple choice questions, each featuring hints and explanations. Be confident and exam-ready!

The pricing strategy that sets prices very low to generate new sales, even at the expense of profit, is known as sales-oriented pricing. This approach prioritizes increasing market share over immediate profitability. Businesses employing this strategy aim to attract customers and increase sales volume, believing that once they gain a substantial customer base, they can either raise prices later or achieve cost efficiencies through higher sales.

Sales-oriented pricing can be particularly effective in highly competitive markets or when introducing a new product where the goal is to rapidly capture consumer attention and enhance market presence. By focusing on sales volume, companies can benefit from economies of scale or improved brand loyalty over time.

In contrast, profit-oriented strategies focus on maximizing profits per unit, which may not prioritize volume in the same way, and target profit pricing involves setting prices to achieve a specific profit target, rather than focusing on volume of sales. Customer-oriented pricing emphasizes understanding and meeting customer needs but does not necessarily imply low pricing.