In the competitive landscape of today's business world, launching a product and scaling up is one complex endeavor. So how do big brands do that? They use multiple strategies. One of the most common strategies used in the market is the "Penetration Strategy". In the Indian market, convincing a customer to try a new product and make them switch from their regular product to the new product is an arduous task. Even big international brands like Danone, and Dunkin Donuts have failed in such attempts.
When a brand launches a new product it sets the price very low so that people will be curious to try it. It is basically to make them think " What is the harm in trying it? Anyway, it is not going to cost me much." Hence they try it. Once they try it they get a feel of a product or a service that adds value to their life and start using it more often. Once the brand recognises that a significant number of users love their product they start increasing their prices. At this point, people don't mind paying that money as they have understood the value of the product.
I guess you all would have thought of a famous brand that disrupted the market with this pricing strategy. Yes, Reliance-Jio used this strategy during its entry into the market. When people were hesitating to pay 100s for 1GB of data, Jio entered and provided 1GB/day for free. This news spread across the country and almost every household had a Jio SIM card. This made people try different digital services like streaming videos, and music, paying bills, booking tickets, etc. After a few months of this remarkable launch, the Internet has become almost an inevitable part most of Indian households. At this point, Jio understood its market share and increased its prices. Now it holds almost 40% of the wireless market share in India.
One more service provider company that followed a similar strategy was "Ola". When people were trying to find a balance between the hurdles of commuting through public transport and fighting with private taxis/ cabs, Ola provided an affordable and comfortable ride solution. Once it gained a significant number of users, it revised its fares and still tried to retain most of its users. "What other brands do you think followed this strategy?' Add them in the comments to discuss it.
