The basic idea of penetration pricing is to attract customers to a new product or service by offering a low price in the early market phase.
In the case of price penetration, companies promote new products or services by setting a low price. This strategy can lead to market penetration and result in higher market shares and sales volumes by winning customers from competitors.
Once prices increase, there is a risk of losing customers. Customers often expect permanently low prices and may become dissatisfied and stop purchasing the product or service if the prices increase.
By introducing a low entry price, consumers may get the impression that the brand is low-quality.
Penetration Pricing - Investopedia
Penetration Pricing - Corporate Finance Institute