The Fruit4U company produces gourmet, organically produced fruit popsicles and uses an aggressive pricing strategy by slashing prices to penetrate the market. What negative effects could this pricing strategy have?

a. may bring higher profits for the company
b. may increase the time the product remains on the shelves
c. may affect the product and company image, alienating its current market

C. may affect the product and company image, alienating its current market

Explanation: Prices of goods and services can be used as a competitive weapon or strategy to gain or maintain market share. Penetration pricing sets price levels low enough to quickly build market share and this may affect the product (as customers expect low prices permanently for the product) , company image (as the brand might be perceived as cheap) and might alienate the company's market (when customers seek perceived higher quality products).

Fruit4U lowering its price for its

gourmet probably in an effort to increase the customer base, may also lead to the product being sold at a loss, a loss it probably could not absorb. Penetrative pricing though, achieves market saturation before competitors copy the product, as such can be seen as an advantage.

c.

clarify customers’ doubts only when asked.