In today's fast-paced business environment, having a solid understanding of competitor pricing can be the key to success. However, without concrete examples of how to do it, it may prove challenging to comprehend and execute correctly.
Hence, in this blog post, we'll delve into the various examples of competitor pricing for B2B and B2C companies. But before that, you may want to read about the advantages of competitive pricing and how it helps companies. We'll also explore some generic examples of price competition across industries and a competitive pricing strategy example to give you a complete picture of the market dynamics.
Examples of Competitor Pricing in B2B Industry
B2B companies often rely on competitor pricing to ensure they remain competitive in their respective markets. Here are a few competitive pricing company examples for clarity:
1. Salesforce vs. Microsoft Dynamics
As leading providers of CRM (Customer Relationship Management) software, Salesforce and Microsoft Dynamics are always in fierce competition. One striking example of competitor pricing in this space is the ongoing price battle between these giants. Both companies frequently analyse their rival's pricing structure to ensure they provide competitive offers, often leading to aggressive discounting and promotional offers for customers.
Now, let’s peek into a few statistics from leading researchers about a few outcomes of their competitiveness.
- A 2021 survey by G2 found that Salesforce was rated as having a higher overall satisfaction rating (4.3/5) compared to Microsoft Dynamics 365 (3.8/5), but Microsoft Dynamics 365 was rated as having a better value for money (3.9/5) compared to Salesforce (3.6/5).
- A 2019 survey by SoftwareReviews found that while Microsoft Dynamics was the most commonly used CRM system among respondents, it rated lower than Salesforce regarding vendor support, flexibility and customisation, and product strategy and rate of improvement.
- In a 2021 report by Gartner, Microsoft Dynamics 365 was identified as a "Leader" in the CRM market along with Salesforce, with both vendors being praised for their robust CRM offerings.
2. Slack vs. Microsoft Teams
The market for collaboration tools is another arena where we can see examples of competitor pricing. Slack, which was once the leader in this space, has had to adjust its pricing strategy to compete with Microsoft Teams, a formidable rival offering similar functionality at lower prices or bundled with other Microsoft products.
Let’s look at some other examples of their fierce competition:
- A 2019 report by Spiceworks found that 41% of businesses surveyed used Microsoft Teams compared to 18% that used Slack. The report noted that one reason for Teams' popularity was its integration with Microsoft Office 365, which many businesses already use.
- In 2020, Slack filed an antitrust complaint against Microsoft with the European Commission, alleging that Microsoft was unfairly bundling Teams with its Office suite to give it an advantage over Slack. Slack argued that this bundling was anti-competitive and prevented fair competition in the market.
- In a 2021 survey by Statista, 29% of respondents said they used Microsoft Teams as their primary collaboration tool, while 5% said they used Slack. However, the survey also noted that Slack was more popular among smaller businesses with fewer than 100 employees, while Microsoft Teams was more popular among larger enterprises.
Examples of Competitor Pricing in B2C Industry
In the B2C (Business-to-Consumer) sector, competition can be even more intense, leading to numerous examples of competitor pricing. Here are two notable competitive pricing company examples:
1. Amazon vs. Walmart
Both Amazon and Walmart are continually adjusting their prices to maintain their competitive edge. One competitive pricing strategy example is the use of dynamic pricing algorithms, which allows these companies to change product prices in real-time based on factors such as demand, inventory, and competitor prices. This approach has led to fierce price competition, with companies constantly trying to undercut each other.
Here are a few data points that serve as practical examples of competitor pricing and their outcome:
- In a 2020 study by Digital Commerce 360, 67% of US shoppers said they frequently or always shop at Walmart for its competitive prices, while 59% said the same about Amazon.
- A 2021 study by Jungle Scout found that, on average, Walmart's prices were around 4% lower than Amazon's for identical products across 10 popular categories.
- A 2019 study by Profitero found that Walmart's online prices were the most competitive to Amazon's, thereby tightening the gap by only 3%. Walmart took to aggressive price-matching activities. The retailer matched Amazon prices on 53% of all CPG products studied and 67% in grocery.
2. Uber vs. Lyft
In the ridesharing industry, Uber and Lyft are prime examples of competitor pricing. To attract riders, both companies frequently offer discounts and promotions, all the while monitoring each other's pricing to remain competitive. This aggressive pricing competition has resulted in lower prices for consumers and has changed the landscape of urban transportation.
Here are a few examples of price competition between Uber and Lyft:
- A 2019 study by Ridester found that, on average, Lyft rides were 4% cheaper than Uber rides, with the average Lyft fare being $12.53 compared to Uber's $13.05.
- A 2019 study by RideGuru found that Uber and Lyft prices were highly variable by location and time of day, with prices sometimes varying by more than 50% for the same route and time.
- According to Investopedia, Uber is the cheaper company, with an average ride fare of $20, compared to Lyft’s $27.
Examples of Price Competition across Industries
Price competition is an essential aspect of market dynamics, and there are countless examples of companies engaging in this pricing strategy. This not only helps them stay relevant in the market but also helps improve their brand positioning.
Specific industries are sensitive to price changes or market shifts. Hence, in order to stay on top, competitive pricing is one of their crucial activities. Some competitive pricing company examples include:
Airlines are known for intense price competition, as they all vie for passengers in a highly competitive market. One classic example is the battle between legacy airlines and low-cost carriers, such as American Airlines and Southwest Airlines. These companies employ various strategies, including offering discounted fares, to entice customers and remain competitive.
2. Fast-food chains
Fast-food chains, such as McDonald's, Burger King, and KFC, are other companies known for their price competition. These businesses often engage in price wars, discounting their menu items to draw in customers and compete with their rivals.
Moreover, there are a few pricing factors for competitive pricing that you must know before getting started. Knowing the market, analysing properly and then adjusting prices go a long way. However, you don’t have to tweak things manually. Today’s AI-driven pricing platforms rely on advanced data sets and accurate market trends to suggest optimal prices. Better yet, you can combine the strategies with your own business rules as well. Take a look at the 10 Best Competitive Pricing Tools that brands are leveraging to stay ahead of the game. Let’s quickly take a look at a few strategies below.
3 Quick Strategies for Competitive Pricing
Now that we've examined various examples of competitor pricing, we must understand how businesses can develop a competitive pricing strategy. You can read the details about the 8 Techniques for Effective Competitive Pricing Success. Here are a few key steps:
Begin by gathering information on your competitors' pricing structures, promotions, and discounts. This information will provide valuable insights into your rivals' strategies and help you identify opportunities for competitive pricing.
You can use price scraping tools like Octoparse, Scrapy, Import.io, etc., to gain pricing and discount information from your competitors. You may want to delve deeper into it; hence, feel free to read our blog on Data Scraping: How to Get Competitor Pricing by Price Scraping.
Moreover, businesses find it efficient to cover all the competitive price optimisation processes using an AI-driven pricing platform instead of doing multiple things manually. This not only becomes exhausting and increases time spent on price changes but doesn’t add the expected value as well. SYMSON is a pricing tool that believes in explainable AI while leveraging advanced data quality to find optimal price recommendations.
Next, analyse your findings to identify patterns and trends. Are your competitors offering discounts on specific products or during particular periods? Are they using dynamic pricing algorithms to adjust their prices? Understanding these trends will help you develop a staunch pricing strategy.
Furthermore, competitor price analysis calls for more than just comprehending the data. You must break down your competitors into categories based on how close of a competition they are to you. Then, the strategies will be set around them. To know more, you can read our blog on How to Conduct a Competitive Pricing Analysis.
c. Distinguish between Key Value Items and Price Sensitive Products
Identifying your products helps you set the correct price for each category without losing margin or sales. For price-sensitive products, you may set prices lower or the same as competitors depending on your value proposition. Whereas, for your popular products that don’t react much to price changes, you can set your prices higher. You can find more about this on our Elasticity pricing strategy page.
Moreover, competitive pricing helps brands to stay relevant in the market and always stay on top of their customer’s minds. And tools like SYMSON’s competitive pricing helps such businesses improve profitability and brand positioning with powerful pricing strategies. To know more, head out to our competitive pricing webinar and find a comprehensive understanding.
Do you want a free demo to try how SYMSON can help your business with margin improvement or pricing management? Do you want to learn more? Schedule a call with a consultant and book a 20 minute brainstorm session!