Which of the following is an example of a company increasing its market penetration?

• A. A car company acquires a supplier to reduce production costs.
• B. A food company develops a new product line for a different market segment.
• C. A clothing retailer opens stores in a new country.
• D. A smartphone manufacturer lowers prices to attract more customers in its existing market.

Answer: (D)

Verified step by step guidance

1. Understand the concept of market penetration: it refers to strategies aimed at increasing sales of existing products within the current market.
2. Identify that market penetration involves attracting more customers or increasing usage among existing customers without changing the product or entering new markets.
3. Analyze each option to see if it fits this definition: acquiring a supplier is vertical integration, developing new products targets new segments, opening stores in a new country is market development.
4. Recognize that lowering prices to attract more customers in the existing market is a classic market penetration strategy because it aims to increase market share with the current product and market.
5. Conclude that the example of a smartphone manufacturer lowering prices to attract more customers in its existing market best illustrates market penetration.