price leader

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:
  1. DOMINANT FIRMS that are able to secure compliance to their prices by smaller rivals because of their powerful positions in the market;
  2. 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.

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References in periodicals archive ?
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.
Commission chairman Mark Berry said, "They (Z) have not been a price leader they have simply been a price follower.
based ALDI is viewed by consumers as the affordable price leader.
It said it was determined to ensure Primark remained a price leader on the high street to help revive sales growth.
It is a clean-sheet, light-jet design that combines a midsize-jet cabin, industry-leading passenger and cockpit technology with extremely low occupied hourly rates, 25 percent below our current price leader, the Hawker 400XP.
1billion Dutch state handout, are not allowed to be a price leader in any European country until the cash is repaid.
The first quarter results were in line with management's projections as we remain committed to being the low price leader while providing a friendly and satisfying shopping experience to our customers on every one of their visits to our supermarkets," said Jack H.
We are pleased to enter into this partnership with Alien because it has a proven record for being a price leader while still providing exceptional quality," says MPI President Randy Kocher.
Since entering the health care arena in 1993, Smart Caregiver has established itself as the low price leader.
Few companies have the economies of scale or scope to be price leaders (and only one company in any sector can be the price leader).
It's no secret that the 2005 Mustang will came in both VS and VB versions, or that Ford plans to make the VS model more than the price leader.
For our cosmetic surgery example, positioning asks whether you will attempt to be the low price leader or the exclusive high-priced "artist" serving only an elite clientele.