Price-based

Price-based refers to a strategy, decision, or system where the primary consideration or determinant is the established cost or market value of goods, services, or assets. It involves making choices and setting parameters according to the financial implications, the relative cost compared to alternatives, or the revenue generation potential. This approach prioritizes economic factors, such as profit margins, sales targets, or the elasticity of demand, to guide operations and investment. price-based methods often involve adjusting prices to optimize sales volume, market share, or overall profitability. Analysis tools and tactics can be utilized to monitor and determine strategies in price-based plans.

Price-based meaning with examples

• The company's marketing campaign was price-based, offering substantial discounts to capture a larger segment of the budget-conscious consumer market. They lowered prices to a degree that gave them greater market exposure. This approach was designed to increase sales volume, even if it meant accepting a slightly lower profit margin per unit sold. This strategy was a great success and the marketing team achieved a higher market share for their campaign.
• Investment decisions within the hedge fund were strictly price-based, evaluating potential assets solely on their current market valuation and predicted price movements. This approach helped the fund take a measured amount of risk. The fund’s portfolio managers aimed to buy low and sell high, exploiting arbitrage opportunities to generate returns based on price discrepancies. They would analyze data and then act to maximize returns using these models.
• The airline's pricing strategy was heavily price-based, dynamically adjusting ticket prices in real-time depending on demand, competitor pricing, and booking lead times. This model was very effective at maximizing revenue. They used an algorithm to monitor these data points. Customers booking last-minute flights often faced substantially higher fares due to the higher perceived value and limited options. This created some level of complaints from its customers.
• The government implemented a price-based subsidy for renewable energy sources, providing financial incentives linked directly to the price of generated clean energy. This approach ensured economic viability and attracted more investors. This resulted in a growth in the demand of green products. The subsidies acted as a crucial mechanism to stimulate investment in renewable energy technologies, making them competitive with fossil fuels.