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price leading position

English translation: When a firm that is the leader in its sector determines the price of goods or services.

22:51 Feb 17, 2015
English language (monolingual) [PRO]
Bus/Financial - Marketing / Market Research
English term or phrase: price leading position
I'm editing a company's strategy outline for future growth, which is a document that has been written by non-native speakers of English. It refers to the company's aim to establish a "price leading position". What does this mean? Is this an existing thing, or do they mean a leading price position (as in, leading in the industry)? I may be missing something here, but what does "price-leading" mean?
edentranslates
United Kingdom
Selected answer:When a firm that is the leader in its sector determines the price of goods or services.
Explanation:
When a firm that is the leader in its sector determines the price of goods or services. Price leadership can leave the leader's rivals with little choice but to follow its lead and match these prices if they are to hold onto their market share. Alternatively, competitors may also choose to lower their prices in the hope of gaining market share as discounters.

Let's assume that Company XYZ manufactures windshield wipers. It is one of five windshield manufacturers in the country, but its products have the widest distribution. As a result, Company XYZ charges only $10 for a wholesale ABC wiper; its competitors charge $13 or more for virtually the same thing. Company XYZ is a price leader in windshield wipers.

Accordingly, XYZ's competitors often have to play defense rather than offense: that is, they might need to drop their prices down to $10 in order to compete and keep their market share. If they can afford it, they might even drop below $10 in an effort to scoop up more market share (which may cost a lot). As you can see, Company XYZ sets the price level, and all its competitors can do is react to it.

The classic case was of Pepsico in Argentina that reduced its prices to such an extent, that the competitors got wiped out in 30 years. Yes, Pepsico suffered losses in Argentina for 30 years.

http://www.investopedia.com/terms/p/price-leadership.asp

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Note added at 5 hrs (2015-02-18 04:40:45 GMT)
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http://www.investinganswers.com/financial-dictionary/economi...
Selected response from:

acetran
Grading comment
Selected automatically based on peer agreement.
4 KudoZ points were awarded for this answer



SUMMARY OF ALL EXPLANATIONS PROVIDED
4 +3become a price leader
Veronica Sardon
4 +3When a firm that is the leader in its sector determines the price of goods or services.
acetran


  

Answers


5 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +3
become a price leader


Explanation:
Have a look at the link before. A price leader is the price-setter in the industry.


    Reference: http://www.investopedia.com/terms/p/price-leadership.asp
Veronica Sardon
Argentina
Specializes in field
Native speaker of: Native in EnglishEnglish, Native in SpanishSpanish

Peer comments on this answer (and responses from the answerer)
agree  Natalia Pashkovskaya
3 hrs
  -> Thanks, Natalia!
agree  Charlesp
12 hrs
  -> Thanks, Charles!
agree  Yvonne Gallagher: price-setting position/become a price setter
5 days
Login to enter a peer comment (or grade)

5 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +3
When a firm that is the leader in its sector determines the price of goods or services.


Explanation:
When a firm that is the leader in its sector determines the price of goods or services. Price leadership can leave the leader's rivals with little choice but to follow its lead and match these prices if they are to hold onto their market share. Alternatively, competitors may also choose to lower their prices in the hope of gaining market share as discounters.

Let's assume that Company XYZ manufactures windshield wipers. It is one of five windshield manufacturers in the country, but its products have the widest distribution. As a result, Company XYZ charges only $10 for a wholesale ABC wiper; its competitors charge $13 or more for virtually the same thing. Company XYZ is a price leader in windshield wipers.

Accordingly, XYZ's competitors often have to play defense rather than offense: that is, they might need to drop their prices down to $10 in order to compete and keep their market share. If they can afford it, they might even drop below $10 in an effort to scoop up more market share (which may cost a lot). As you can see, Company XYZ sets the price level, and all its competitors can do is react to it.

The classic case was of Pepsico in Argentina that reduced its prices to such an extent, that the competitors got wiped out in 30 years. Yes, Pepsico suffered losses in Argentina for 30 years.

http://www.investopedia.com/terms/p/price-leadership.asp

--------------------------------------------------
Note added at 5 hrs (2015-02-18 04:40:45 GMT)
--------------------------------------------------

http://www.investinganswers.com/financial-dictionary/economi...

acetran
Native speaker of: Native in HindiHindi, Native in EnglishEnglish
PRO pts in category: 4
Grading comment
Selected automatically based on peer agreement.

Peer comments on this answer (and responses from the answerer)
agree  magdadh
5 hrs
  -> Hey, thanks :)
agree  Charlesp
6 hrs
  -> Thanks!
agree  Giusi N.
1 day 2 hrs
  -> Hey, thanks :)
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