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Pricing strategy based on competition8/25/2023 Sometimes, pricing in the middle of the range, relative to competitors, works just as effectively and does not significantly impact your bottom line.Īnother factor to consider is whether your product or service is price elastic this means that the price change will have a significant impact on demand as consumers are more price sensitive. The strategy of competitive pricing does not always mean that one should be cutting their prices, or be pricing at the lowest point in the market. Competitor price monitoring allows you to respond to every move your competitors make, which can further help in the better positioning of your business. By making the prices the same as your competitors or even cheaper, consumers will be less inclined to move from your brand or choose your competitors products/services over yours, thus enabling you to maintain your market share. With this tool you can monitor, control and make changes to the prices accordingly.Ĭompetitive pricing analysis allows the business to regulate the competition by preventing the loss of customers and market share to the competitors. The tool provides you with global insights on your competitor, as well as tracking your competitor’s products or services range and prices over time, for on-going analysis. Thus, to save you from unfortunate results, using a leading competitor monitoring tool can optimise your competitive pricing strategy. In some cases, some business owners don’t achieve their goals as they have incorrectly conducted and utilised their competitive pricing strategy. Assessing the long term implications requires the business owner to have the ability to effectively understand the overarching trend, and their position in the industry.Įnriching your knowledge about your industry and relevant competitors can allow you to make a better business-related decision, which in the long run, can increase your chances of success in the business world. The results of a competitive pricing strategy are usually evident after a short amount of time. Implementing a competitive pricing strategy for your business can help the business grow. Read on to discover several benefits on why competitive pricing is important for your business: Benefits of Competitive Pricing Strategy So, if your product or service is the same price as your competitor - but the quality is better-quality - then customers will be more inclined to choose you. The product features are the same or very similar, which is why producers focus on trying to differentiate or offer a unique buying experience. The prices of the products or services match the price that's offered by your competitors. This type of pricing occurs in the market where the brand is reputable, and consumers buy based on quality rather than price, e.g. This pricing strategy is suitable for a business who provide added features and benefits that your competitors lack. The prices of the products or services you offer are higher in comparison to your competitors. A low pricing strategy is generally adopted when you benefit from economies of scale, and you’re able to bulk produce products, which in return reduces the cost of production. The products or services you offer are lower than your competitors. There are three types of competitive pricing a company should consider: This clearly shows that for online shoppers, pricing and price comparisons are critical factors that impact the buyer’s journey. According to research, online shoppers visit at least three websites before arriving at a final decision. In this lucrative environment, pricing is one of the most critical factors behind consumers purchasing decisions. With the emergence of digital, there has been a significant increase in the number of e-commerce platforms - as the majority of consumers now shop online. Competitive pricing strategy is where the final prices on their products or services have been analysed, modified and evaluated against the prices of their competitors. With the market becoming more and more competitive, companies should carefully implement an effective competitive pricing strategy. The advantages of competitive pricing strategy.īy Joemar Carillo, a content writer for Assosia, a retail research company based in the UK.
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