Every day low price

Date of publication: June 15, 1996

Abstract:

Everyday Low Price (EDLP), along with Category Management, Consumer Loyalty and Efficient Consumer Response (ECR) have become the jargon words for Marketing in the mid 1990’s. Everyday Low Price, an American import, was originally devised as a way of smoothing the production line process and minimising the amount of money paid out on promotion, principally within the fast moving consumer good marketplace. This paper argues that EDLP is inappropriate for the British marketplace. Both the legislative differences, the dominance of a small number of retailers, and the very low pricing in some markets indicate substantially different fast moving consumer good market conditions. Through the analysis of continuous consumer panel data, the paper examines the effect in marketplaces where EDLP has been introduced, and the subsequent effects on both the brands in question and on the cheaper budget brands and private label products. The paper also considers whether a consistent price policy, in a marketplace where promotion remains a key driver of short term share is a realistic position for a manufacturer to adopt.

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