Aarav, a small entrepreneur, is manufacturing portable electric iron for domestic use with the brand name 'P-IRON’.This iron is in great demand. He finds that the cost of production per unit of the iron is Rs.1,000 and he can sell the same at Rs.1,200 per unit. The competitors in the market are selling this type of iron at the rate of Rs.2,000. Aarav’s objective is not to earn profit in the short-run but to capture the largest market. His expectation is that the customers will be attracted towards the new brand because of low price.
Identify the method of pricing adopted by Aarav to capture the substantial portion of the market. Also, state any two advantages of this method of pricing.