Question

When VCRs were introduced in the​ mid-1970s, they were priced at​ $900 and above. As more competitors and new technology entered the​ market, the price dropped dramatically. This is an example of​ _______.

Answer 1

penetration pricing.

Answer 2

I believe the answer is: Penetration pricing

In penetration pricing, the price of product would be set to be lower compared to other product in the beginning of its introduction, and would gradually be increased as the company obtain more market share.

This strategy is commonly used only if the new product has a clear advantage in term of quality compared to the competitors.