A startup streaming service introduces a subscription at $5/month, well below the $10/month industry standard, to attract a significant number of users quickly. Which potential risk is not associated with penetration pricing?
1
Building customer loyalty at lower price expectations.
2
Creating an unsustainable financial model due to lower margins.
3
Inviting aggressive retaliation from competitors.
4
Gaining rapid market share at the expense of profitability.
5
Driving high operational costs due to premium positioning.