Price Leader

A company that sets a price for a product and whose market share and/or brand loyalty is so strong that other companies are compelled to match or beat the price. The company that first changes the price is said to show price leadership.

price leader

a FIRM that establishes the market PRICE for a good or service and initiates price changes that are then followed by competing suppliers. Two kinds of price leader have been identified:

DOMINANT FIRMS that are able to secure compliance to their prices by smaller rivals because of their powerful positions in the market;
barometric price leaders whose price changes are accepted by other suppliers because of their recognized adeptness at establishing prices fully reflective of changing market conditions.

Price leader-follower relationships are a typical feature of OLIGOPOLY markets in coordinating price changes and tend to result in a strong degree of PRICE PARALLELISM. See PRICE LEADERSHIP.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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References in periodicals archive

VIVA offers them internationally sourced grocery and household products at prices that are 25-40% cheaper than other supermarket brands in UAE - making VIVA a price leader in this highly competitive category.

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Pobeda has invariably been the price leader in the Russian air market.

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BOSTON -- A new report from global e-commerce analytics firm Profitero reveals that Amazon may be the current online price leader, but that lead could be slipping as Walmart ramps up its efforts to be price competitive.

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This year's price leader was from Dewi Williams, of GP Williams& Co, Abergele, whose daughter Dona closed her Penrhyn Bay hairdressing salon to join her father at the sale with his 18-strong consignment.

NSA ram sale profits from lamb upturn; HEADLINE PRICES UP IN BUILTH WELLS AND LED BY ABERGELE TEXEL

Note that one reason for using this model as a benchmark derives from the fact that any profit seeking firm with a non-zero market share can increase its profit by acting as a dominant firm price leader. Even a firm with a 15 % market share could increase its profit by abandoning price competition and conceding 85 % of the market to its rivals.

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The company is the biggest internet retailers in Lithuania which sells different kinds of non-grocery goods and is positioned as a price leader in Lithuanian internet retailing.

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With its low gas price strategy nationwide, it is quite obvious that Costco is looking to make a statement with consumers that it is a price leader. In the case of this new store, it is also trying to get consumers to pay a bit more attention and trying to build awareness of its new, and I might add, very impressive store.

Of gas prices and Costco: with lower energy costs and a bump in the economy, 2015 could be the best year for grocery retailers in a decade

positions it as the price leader in its space." The note added that the site now offers in-store pickup for items purchased online, and "better product information and account capabilities."

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Commenting on his assurance of being price competitive, Sauvage said Al Meera has always aimed to be a price leader and they would continue to do so in the future as well.

Al Meera offers most competitive price: Sauvage

According to the survey, Batavia, Ill.-based ALDI is viewed by consumers as the affordable price leader. Bentonville, Ark.-based Walmart and Issaquah, Wash.-based Costco ranked second and third, respectively, in the low-price category.

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