Everyday Low Pricing. Everyday low pricing (EDLP) has received increased attention as a means of determining price and promotions over time. EDLP avoids the saw tooth, whiplash pattern of alternation price increases and decreases or discounts in favor of a more consistent set of “everyday” base prices on products. In many cases, these EDLP prices are based on the value-pricing considerations we’ve noted above.
The P&G Experience. In the early 1990s, Procter & Gamble made a well-publicized conversion to EDLP.64 By reducing list prices on half its brands and eliminating many temporary discounts, P&G reported that it saved $175 million in 1991, or 10 percent of its previous year’s profits. Advocates of EDLP argue that maintaining consistently low prices on major items every day helps build brand loyalty. Fend off private-label inroads, and reduce manufacturing and inventory costs.65