PRICE COMPETITION Meaning and
Definition
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Price competition refers to a business strategy employed by companies in a given market to gain a competitive advantage through the setting of lower prices for their products or services. In price competition, businesses aim to attract customers by offering lower prices compared to their competitors or by implementing price reductions on existing offerings. This approach is focused on driving sales volume through price differentials rather than relying solely on product differentiation or other non-price factors.
Price competition is often seen as a result of market dynamics, where numerous competitors sell similar or substitute products to the target market. In this context, businesses engage in price wars, where rivals attempt to outbid each other in terms of reduced prices to capture a larger share of the market. The driving motivation behind price competition is to enhance market share and increase sales, thereby obtaining economies of scale and potential long-term profitability.
While price competition can be beneficial for consumers as it provides them with a wider range of options at more affordable prices, it can also be challenging for businesses. Engaging in price competition may result in reduced profit margins, which can affect a company's ability to invest in product development, marketing, or other aspects necessary for long-term growth.
In summary, price competition is a commercial strategy where businesses strive to gain a competitive edge by offering lower prices compared to their rivals, aiming to increase sales volume and market share.
Common Misspellings for PRICE COMPETITION
- orice competition
- lrice competition
- -rice competition
- 0rice competition
- peice competition
- pdice competition
- pfice competition
- ptice competition
- p5ice competition
- p4ice competition
- pruce competition
- prjce competition
- prkce competition
- proce competition
- pr9ce competition
- pr8ce competition
- prixe competition
- prive competition
- prife competition
Etymology of PRICE COMPETITION
The word "price" originated from the Middle English word "pris", which came from the Old French word "pris", meaning "value", "reward", or "price". It can be traced back to the Latin word "pretium", meaning "value", "price", or "reward".
The word "competition" came from the Latin word "competitio", which means "rivalry" or "competition". It is derived from the verb "competere", meaning "to strive together" or "to seek together".
When combined, the term "price competition" refers to a situation where businesses or sellers vie against each other by offering lower prices in an attempt to attract customers and gain a competitive advantage.
Similar spelling word for PRICE COMPETITION
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