A competitive pricing strategy is a price-setting that is based on your competitors’ prices. This pricing method focuses solely on the prices of your competitors that are public, but it does not take into account how much customers value the product or production costs.
A strong competitive pricing model is based on thorough market research. When you know how the prices of your top competitors in your market and how those prices might meet customer expectations, you have a basis for determining the rates of the prices of your own products or services. Competitive pricing strategies can come in many forms, a business can choose to always be the cheapest of their competitors or always offer the average price of the highest and lowest priced competitors - they all count as competitive pricing strategies.
You can use competitive pricing in several ways. This really depends on your use case. Let's give you some examples of how you could use competitive pricing.
Brands in that category want to be perceived as high-value and status products. To reach this goal, they will always want to be priced exceptionally high in comparison to similar items. Although the quality is often better than cheaper fashion brands, the increase in price is not persé equal to the increase in quality.
These clothing products are made as part of the Amazon brand. This brand wants to be among the cheapest by offering as low as possible prices to its customers. In contrast to the designer brands, Amazon essentials use competitive pricing to be the cheapest on the market.
This is a classic example of a company that offers a “best price guarantee”. They claim to check all the prices of their products daily to make sure that they remain the cheapest on the market. Therefore, they will always match the lowest price of their competitors, to give customers the best deal possible.
Watch our webinar for a comprehensive look at how competitive pricing strategy can help your organisation.
Positioning your prices in your competitive landscape is challenging, because of the constantly changing market, conditions, and prices. Using tools like SYMSON really helps you to get insights into this pricing landscape. But the question remains for you as a company, how you should implement such a strategy. In order to do so, we recommend following these steps
Define the logic in the SYMSON platform to get the prices of your competitors. You could decide to configure a list of your top 10 key- competitors. SYMSON can get all the pricing data from Google Shopping or specific imports or website scrapers can be used to get the prices of your competitors. We recommend taking the following steps to implement a competitor-based pricing strategy in SYMSON.