Price Pressure
The downward pressure on prices caused by competition, often from large retailers or private label brands, impacting the profitability of CPG companies.
Implications
The downward or upward force on prices caused by factors such as competition, supply and demand dynamics, and market conditions, often used to assess pricing strategies, market trends, and profitability, relevant in pricing strategy, market analysis, and business economics.
Example
Example: A tech company faces price pressure from new competitors entering the market with similar products at lower prices, forcing the company to either reduce its prices or enhance its value proposition to maintain market share.
Related Terms
Different from price rigidity, where prices remain stable despite changes in market conditions, price pressure reflects the forces that can cause prices to fluctuate, requiring companies to continuously monitor and adjust their pricing strategies to remain competitive and profitable.
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