Low-Price Strategy

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Low-Price Strategy

In marketing, a strategy in which a newcomer to a market establishes a low price for products, especially when there is already significant competition. This can be advantageous when the seller must rely on high volume for profit; that is, even though profit margins would be low, the net income would still be high because of the large number of sales. A low-price strategy also helps create market share.
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As the Company moves in the direction of an everyday low price strategy with a lower expense structure, the number of advertising circulars this fiscal year will be reduced from 22 to 16, including elimination of one of two advertising circulars in October and one of three advertising circulars in November.
This indicates that our everyday low price strategy and store renewal programs are achieving desired sales results.
We were able to achieve these outstanding results by having the best selection of merchandise stocked in depth and by being competitive with our everyday low price strategy.
Same store sales were strong and our new everyday low price strategy was well received by our customers.
Michael Young, President of Hi/LO, stated, "Dirk Hoyt has done an outstanding job at Hi/LO and, in particular, made a significant contribution in the implementation of the Company's new low price strategy over the last twelve months.
The industry is also highly price sensitive and thus is characterized by industry participants adopting a low price strategy and focusing on reducing their production cost.
The other possible angle of a low price strategy is the leverage that iPhone commands when it comes to bargaining exclusive deals with carriers.
Management was concerned whether the low price strategy could sustain growth.
Bradley criticised Asda's decision to issue the vouchers and cards, after chief executive Andy Bond reaffirmed Asda's commitment to an everyday low price strategy last year, by claiming retailers could "not buy loyalty with plastic points".
Analysts suggest that Dell's entrance - especially in view of its low price strategy - could well spur renewed interest in PDAs, but may force companies like Palm, which recently unveiled its latest Tungsten T model, to cut prices.
This is not to say that their low price strategy offers them a sustainable competitive advantage.