Pricing Related Guides
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A benchmark price is an actual price that is paid on a liquid market that can be used as a reference for buyers and sellers. The following are common examples.Commodity MarketsThe term benchmark price is primarily associated with commodity markets. Major commodities such as gold, corn and oil trade on international exchanges. The prices on these markets are open to the public and are widely used as a reference in negotiating prices. Prices will vary from the benchmark price based on quality and location. For example, a farmer near a large market may negotiate a higher price for crops if they can sell directly to local shops because this reduces transportation costs and customers may prefer local produce. If the farmer gets a premium on the benchmark price, the price may still rise and fall with the benchmark.
Product MarketsIt is common to use the price of a major competitor as a benchmark. For example, a small bookseller may reference the prices of an ecommerce company when setting prices.In cases where pricing does not occur in a public market, market intelligence firms may collect recent price data to build a benchmark for an industry. This is then sold to both buyers and sellers who use it as a reference for strategy and negotiation. For example, benchmarks for real estate transactions, consulting services or construction projects.|
| Type | | | Definition | The price of recent transactions on a market that can be used as a reference by buyers and sellers. | | Related Concepts | |
Pricing
This is the complete list of articles we have written about pricing.
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The common types of pricing.
An overview of common pricing strategies.
An overview of common pricing strategies.
The common types of sales promotion.
The common ways to optimize pricing.
A definition of flat pricing with examples.
The definition of revenue management with examples.
The common types of dynamic pricing.
The common types of price objective.
The two common meanings of the term price escalation.
A definition of market intelligence with examples.
A definition of competitive benchmarking with examples.
An overview of market research analysis with examples.
An overview of marketing analysis with examples.
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