Wal-Mart. You can't talk about penetration pricing without talking about Wal-Mart. If you ask any consumer today why Wal-Mart prices are so much lower, thay will tell you it's because Wal-Mart buys in such large quantity, and many will also tell you it's because they squeeze their vendors and they pay poor wages and benefits to their employees. Oh... and they also carry some poor-quality brands, along with better ones. (See the section below under “How to Avoid a Price War” for how smart Wal-Mart when they first launched.)