Which pricing strategy is often used to attract attention in the early stages of a product's launch?

Penetration pricing is a strategy specifically designed to attract attention and gain a foothold in the market during the early stages of a product's launch. This approach involves setting a low initial price to encourage consumers to try the product, making it more accessible and appealing compared to existing competitors. By drawing in price-sensitive customers, the company can quickly increase its market share and establish brand loyalty.

This strategy works on the premise that once customers are engaged with the product and satisfied, they are more likely to continue purchasing it even when prices are eventually raised. The low entry price helps to combat the natural hesitance consumers may have to try a new product, thus effectively breaking through market barriers and facilitating quicker word-of-mouth promotion.

In contrast, other pricing strategies, such as skimming pricing, are oriented towards maximizing short-term profits through high initial prices for innovative products, while competitive pricing focuses on matching competitors' prices. Value-based pricing emphasizes the perceived value to customers rather than cost or competition, thus not specifically addressing the goal of attracting attention at launch like penetration pricing does.