Management Glossary

  Search Results: pricing power
pricing power

An organization's ability to set prices without generating an inordinate negative affect on demand for its products and/or services. Pricing power is affected by a number of factors, including the value that buyers place on the goods and/or services, the level of competition, the availability of goods or services that can be substituted for the organization's goods or services (e.g., public transit could be substituted for car ownership) and overall inflation.

Pricing power is an issue for more than just companies selling goods and services. For example, one can discuss the pricing power of unions or individual employees when it comes to setting wages.

Contributed by: ManagerWise Staff

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