Hi-low price

Examples of Hi-low price in the following topics:

• Everyday Low Pricing

  • Everyday low price is a pricing strategy offering consumers a low price without having to wait for sale price events or comparison shopping.
  • Everyday low price (EDLP) is a pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shopping.
  • One 1994 study of an 86-store supermarket grocery chain in the United States concluded that a 10% EDLP price decrease in a category increased sales volume by 3%, while a 10% Hi-Low price increase led to a 3% sales decrease; but that because consumer demand at the supermarket did not respond much to changes in everyday price, an EDLP policy reduced profits by 18%, while Hi-Lo pricing increased profits by 15%.
  • Its everyday low prices are available to everyone.
  • Translate the meaning of the EDLP (everyday low price) pricing strategy

• High/Low Pricing

  • High-low pricing is a strategy where most goods offered are priced higher than competitors, but lower prices are offered on other key items.
  • High-low pricing is a method of pricing for an organization where the goods or services offered by the organization are regularly priced higher than competitors.
  • High-low pricing is a type of pricing strategy adopted by companies, usually small and medium sized retail firms.
  • The way competition prevails in the shoe industry is through high-low price.
  • Those firms will follow everyday low price strategy in order to compete in the market.

• Price Floors

  • A binding price floor is a price control that limits how low a price can be charged for a product or service.
  • A price floor is a price control that limits how low a price can be charged for a product or service.
  • For a price floor to be effective, it must be greater than the free-market equilibrium price.
  • An example of a price floor is the federal minimum wage.
  • If a price floor is set above the equilibrium price, consumers will demand less and producers will supply more.

• The Importance of Price to Marketers

  • If, however, a firms wants to position itself as a low-cost provider, it will charge low prices.
  • Just as they do with high-end providers, consumers know what to expect when they see low prices.
  • Both a price that is too high and one that is too low can limit growth.
  • If, however, a firm wants to position itself as a low-cost provider, it will charge low prices.
  • Just as they do with high-end providers, consumers know what to expect when they see low prices.

• The Meaning of Price

  • But what exactly is "price?
  • Further, if one can negotiate a deal reducing the price by USD 15,000, that would be his incentive to purchase.
  • The latter role for price acknowledges that man's response to price is sometimes unpredictable and pretesting price manipulation is a necessary task.
  • If Louis Vuitton merchandise was offered at low prices it might significantly undermine the brand value, much of which is based upon exclusivity.
  • Differentiate between cost, customer's view of price, and society's view of price

• Competition-Based Pricing

  • Competitive-based pricing, or market-oriented pricing, involves setting a price based upon analysis and research compiled from the target market .
  • For instance, if the competitors are pricing their products at a lower price, then it's up to them to either price their goods at a higher or lower price, all depending on what the company wants to achieve.
  • One advantage of competitive-based pricing is that it avoids price competition that can damage the company.
  • The price may also barely cover production costs, resulting in low profits.
  • Status-quo pricing, also known as competition pricing, involves maintaining existing prices or basing prices on what other firms are charging.

• Demand-Based Pricing

  • Demand-based pricing, also known as customer-based pricing, is any pricing method that uses consumer demand - based on perceived value - as the central element.
  • These include: price skimming, price discrimination, psychological pricing, bundle pricing, penetration pricing, and value-based pricing.
  • Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time.
  • Penetration pricing is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers.
  • By definition, long term prices based on value-based pricing are always higher or equal to the prices derived from cost-based pricing.

• Information Costs and Bond Prices

  • Information costs influence the bond prices and interest rates.
  • We include these costs in the bond's market price and interest rate, and they raise the cost of borrowing.
  • We can use the demand and supply analysis to create two markets for the high and low information- cost bond markets.
  • Thus, investors are attracted to the low-information cost bonds, boosting their demand for low information cost bonds, increasing the market price and decreasing market interest rate.
  • Therefore, low-information-cost bonds pay a lower interest rate.

• Predatory Pricing

  • Predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market.
  • Predatory pricing is the practice of selling a product or service at a very low price, with the intention of driving competitors out of the market, or create barriers to entry for potential new competitors.
  • Economists argue that the competitors (the 'prey') know that the predator cannot sustain low prices forever, so it is essentially a game of chicken.
  • This is known as 'low-cost signalling'.
  • Low oil prices in the 1990's were considered a case of alleged predatory pricing.

• Nonprice Competition

  • Non-price competition involves firms distinguishing their products from competing products on the basis of attributes other than price.
  • Since price competition can only go so far, firms often engage in non-price competition.
  • It can be contrasted with price competition, which is where a company tries to distinguish its product or service from competing products on the basis of a low price.
  • Firms will engage in non-price competition, in spite of the additional costs involved, because it is usually more profitable than selling for a lower price and avoids the risk of a price war.
  • Its prices are low, but not necessarily the lowest.