Underpricing: meaning, definitions and examples

This word is used in financial contexts when a product is being sold at a lower price than its actual market value, often unintentionally or due to a miscalculation.

• The company is facing losses due to underpricing its new product.
• Investors were concerned about the underpricing of the initial public offering.

This word is often used in competitive business environments where one company sells goods or services at a lower price than their competitors, potentially implying a strategic move.

• To gain market share, the new player is underselling its more established competitors.
• They managed to dominate the market by consistently underselling other brands.

This term is commonly used in retail and sales to describe the intentional reduction of prices to attract more customers or to clear out inventory.

• The store is discounting all winter clothes by 50%.
• They are offering steep discounting during the holiday season.

This term is generally used to indicate falling short of a target, goal, or expectation, often applied in performance or projections.

• Sales figures are undershooting this quarter's targets.
• The project timeline is undershooting our initial estimates.

Used in financial and business contexts to describe a situation where an asset is priced lower than its market value or potential.

• The company was criticized for underpricing its IPO, which led to lower initial returns.
• Underpricing can attract more investors but might also mean leaving money on the table.

Used when something or someone is given less value or worth than they deserve, often highlighting a lack of recognition or appreciation.

• The artist felt that the gallery constantly undervalued her work.
• Employees often feel demotivated if they believe their efforts are being undervalued.

Commonly used in competitive scenarios to describe offering a lower price than a competitor, with the intention to gain market advantage.

• The new store tried to undercut its competitors by offering lower prices on all products.
• She managed to undercut the competition by reducing their operational costs.

Typically used in negotiations to describe making an offer significantly lower than what is fair or expected, often as a starting point.

• They tried to lowball the seller with an extremely low offer for the house.
• The initial lowball bid was just a strategy to start the negotiation.