Competitor pricing strategy7/29/2023 Alternatively, if your competitors change their prices, you can use this as an opportunity to get a strategic price advantage over them in the short term.īut the only way to do this is to carry out an analysis of your competitors’ pricing regularly. Keeping pace with your competitors means you maintain your price position in comparison to them. As the market changes, so should your prices.Ī simple way to get a better understanding of where to set your prices is to use your competitors’ pricing over time. Sometimes referred to as a ‘loss leader’ a company might look to increase their overall market share by reducing the costs of low-value items to increase overall sales.ĮBook Download: Three principles for delivering experience-led product innovation 3) Track your market position This is particularly popular with retailers. where you could potentially lower prices of some products to grow your market share. Understanding your pricing, and where it puts you against the competition, is essential when it comes to increasing market share and getting one over the competition.Ĭompetitive pricing analysis across your entire product or service range can also help you identify areas of opportunity, e.g. But a bigger risk is severely underpricing your product and potentially losing profits. You can’t position yourself as a more expensive, but better quality product or service, without a barometer of where your price sits against the competition. However you want to position yourself in the marketplace, it’s impossible to do this properly unless you know what the competition is doing. Now, there are several benefits to using competitive pricing analysis, all of which help to guide your decision making and ensure you place and price your product in a way that appeals to customers. Benefits of a competitive pricing analysisĪs we’ve mentioned, competitive pricing analysis should form part of every pricing policy, regardless of whether it’s the main metric you plan to use. Industries like retail, for example, regularly use competitive pricing, especially online as prices can fluctuate regularly.Ĭompetitive pricing analysis should arguably form part of every pricing strategy, as how you price yourself against the market can have a huge impact on your marketing strategy, how you’re viewed in the market, and – ultimately – how successful your sales will be. While it’s used across industries and business sizes, competitive pricing is particularly popular in markets with high sales volumes, typically due to the same types of products being sold. In this guide, we take a look at the topic of competitive pricing analysis and show you how you can use it to beat out the competition.įree eBook: Gain a competitive advantage by leveling up your market research What is a competitive pricing analysis?Ĭompetitive pricing analysis involves completing an in-depth study of your market and how your competitors price their products in comparison to you. However, competitive pricing requires a lot of analysis and research to do effectively. This is particularly important for retail businesses: as they’re not necessarily competing on products - because they’re all selling the same types of products - they need another differentiator to attract customers. Pricing your products based on the competition is not only a great starting point, it can also help distinguish your brand while protecting your market share. Opt for a lower price and you could seriously damage your turnover and profits.īut one common pricing policy used by businesses across all sectors is to use competitive pricing. Price too high and you’ll scare away potential customers. There’s a lot that can determine what the right price should be for your product or service to ensure you get a competitive edge on the competition, while still achieving the profit margin you want. Working out how to price a product can be a challenge for any business.
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