Market penetration pricing

This is the strategy of setting prices low, or below the competition, initially to attract new customers. As stated earlier, if you are planning to deploy this strategy, you will be raising a red-flag for your potential investors or management. Pricing lower than the current market indicates that the most important benefit you have is low prices! Also, keep in mind that a plan to raise prices after an introductory period is difficult, since it is always easier to lower prices than to raise them.