Understanding Competitive Pricing Analysis
Most businesses have rivals selling comparable products or services. A competitive pricing analysis takes a comprehensive look at your competition to see what they're charging and why. The information provided will help you determine where best to price your portfolio, ensuring you send the right message and achieve tremendous success.
Competitor pricing strategies are most popular with products and services coming on to the market that are similar to existing offerings. These new releases have unique characteristics that set them apart. You'll want to employ a competitor pricing strategy once the initial launch excitement is over and the market pricing has reached relative equilibrium.
In most cases, implementing a competitive pricing analysis will involve:
- Examining your product.
- Defining your competitors.
- Collecting relevant price data.
- Analyzing and applying the results.
3 Common Competitor Pricing Strategies
With competitive pricing analysis, you can see how your competitors price their products. Doing so will help you determine whether you want to present yours as the lower- or higher-cost option. You can also compete directly. The best price point for you will depend on the product, your overhead costs and other considerations.
The three competitor pricing strategies are:
Why Evaluate Competitor Pricing?
Analyzing competitor prices will provide you with several key advantages over entering the market blindly.
Achieve Greater Success
A comprehensive competitive price analysis will provide you with a detailed overview of what your products face. You'll have data you can use to make informed decisions about your pricing, so you can price correctly and send the right message.
Gain More Market Share
Knowing how much your competitors charge will help you price your products, helping draw customers from other options and over to yours. You'll also gain the information you need to avoid overpricing your product and pushing potential buyers away.
Take Fewer Risks
When you evaluate competitor pricing, you're getting a feel for the prices customers are already willing to pay. The existing standard will help ensure your prices hit closer to the mark, helping you avoid pricing too low or too high, avoid potential losses and close more sales.
Gain the Advantage of Competitive Price Analysis
Give your business the advantage of competitive price analysis before releasing your next product or service. Our expert consultants will help you use this technique and other strategies to help you achieve sustainable growth and lasting success.
Contact us today to get started evaluating your competition.