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Price Gap
Definition
The difference in price between a product and a competing product, brand, or benchmark, used to evaluate relative pricing position within a category.
How It's Calculated
Product price − Comparison product or benchmark price
(or expressed as a percentage difference)
Example
A premium snack brand is priced at $4.99 while a competing brand is priced at $3.99, resulting in a $1.00 price gap, indicating a higher-priced positioning.
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