What is associated with setting a price lower than a competitor to gain market share?

Setting a price lower than a competitor to gain market share is known as destroyer pricing. This strategy is often used by businesses looking to attract customers away from competitors by offering lower prices, making it an effective approach in highly competitive markets. The intention behind destroyer pricing is typically to increase market share with the hopes that once a significant number of customers is acquired, the business can then either maintain a competitive edge or raise prices gradually after establishing brand loyalty.

Value pricing focuses on providing high perceived value relative to the price charged, rather than simply undercutting competitors. Premium pricing involves setting a higher price point to reflect the quality or exclusivity of a product, while cost-plus pricing is a method where a fixed percentage or amount is added to the cost of production to determine the selling price, rather than competing on price alone.