price cutting
Definition
Noun: - The act of reducing the selling price of goods or services below the standard, usual, or previously advertised price. It is a competitive business strategy often used to attract customers, increase sales volume, or clear out inventory.
Usage
- Price cutting is typically used as a singular noun to describe the general strategy or a specific instance of lowering prices.
- It often occurs in competitive markets, during sales promotions, or when a company wants to gain market share.
Examples
- The fierce competition led to widespread price cutting among electronics retailers.
- The supermarket's aggressive price cutting on staple items drew in many budget-conscious shoppers.
- Analysts warned that prolonged price cutting could harm the industry's overall profitability.
Advanced Usage
- As a competitive tactic: Price cutting can be a double-edged sword; while it may boost short-term sales, it can also trigger price wars and reduce profit margins for all companies involved.
- In economic contexts: Sustained price cutting in a sector can be a sign of deflationary pressures or excessive competition.
Variants and Related Words
- Price cut (noun): A specific instance or the result of price cutting.
- The store announced a significant price cut on all winter clothing.
- To cut prices (verb phrase): The action of reducing prices.
- The new competitor forced established brands to cut prices.
Synonyms
- Price reduction
- Discounting
- Markdown
- Underpricing (specifically setting prices lower than competitors)
Antonyms
- Price increase
- Price hike
- Markup
Related Phrases and Concepts
- Price war: A situation of intense competition where multiple companies repeatedly engage in price cutting.
- The airline industry entered a brutal price war.
- Loss leader: An item sold at a very low price (often at a loss) to attract customers who will then buy other, more profitable items.
- The console was used as a loss leader, with profits made on games and accessories.
Noun
-
cutting the price of merchandise to one lower than the usual or advertised price
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