Tracking competition can be a fool’s errand if not done properly. By properly, we mean using modern technology to cover all the aspects that define your competitor’s product and their pricing methods. In that regard, companies usually target competition that is nearest to them in terms of local positioning. Direct competition, if you will. However, ever since the triple W entered the mainstream, the scope has been slowly shifting to all corners of the globe.
Obviously, you should track your competition’s pricing. There is no question about that. With all the competition that’s constantly growing, consumers have their veritable pick of the litter. In essence, they are spoilt for choice and can easily find the best deals on the required products in just a few taps or clicks. So, in order to keep up with the savvy customers and competitors, businesses turns to price tracking. It allows them to be increasingly competitive and focal in their efforts while achieving greater profitability through the use of data.
Regardless of the industry, a business operates in, even if it’s relatively new or small, a careful research will reveal two or more competitors. Their existence immediately changes the playing field. In a concentrated effort to gain that one step ahead, businesses adopt numerous competitive strategies to increase their competitive advantage. That’s all fine and dandy, but how exactly do you cope with your competition? The most usual suspect in the case of intense competition is the price war.
As every business is unique, there are variances in pricing the products and services in every company. Not all of them incorporate strategies that aim to sell the highest possible amount (or all of it) of what they are selling, just so it could act as an indicator of company’s market performance or success. Rather, the usual approach is setting the pricing to sell the optimal amount of products and services you offer, all the while gaining maximum profit per each sale.
Every business that seeks to achieve maximum levels of profitability needs to think carefully about its pricing. Specifically, it needs to think about how often to change its prices. Once you identify and set the best pricing strategy for your product or service, it can be quite tempting to hold on to it. We know how you reason and we empathize – you spent considerable time and effort to set it up, it works so why would you ever change it?
Keeping an eye on what your competition is doing is a great way for growing your business. Identifying who they are and what they are offering can prove invaluable to make your goods set apart from the rest. It will enable you to set prices competitively and utilize all the elements of the marketing mix to the fullest. If you know or learn a few secrets on the way, all the better but the bottom line stays the same – the more you know about your competition, the more your chances for success grow.
Let’s start off with the basic definition – what are pricing benchmarks? It’s the process of comparing your prices to the prices of the competition in a specific market segment. Why, one might ask, blissful in ignorance. The answer is very simple – because understanding your pricing and your position among your competition is of critical importance to a thriving business. This is especially pertinent to pricing managers and analysts who are trying to stay on pace with persistent fluctuations in the e-commerce ecosystem. Armed with this knowledge, a business is effectively positioning itself in the marketplace so that the target audience is thus willing to choose and pay for its products.
It’s not really a secret to say that every business can benefit from an effective pricing strategy. However, in order to identify which strategy is right for a specific business or industry and set the right (some would say reasonable) price in a highly competitive market, you need to be able to utilize every resource at your disposal. That, for the most part, means performing a price analysis. This post will show what it can do for a business in order for it to succeed.
Pricing objective is a goal that a company sets in order to determine the cost of its product or service. Objectives are usually related to four major groups:
- sales volume
- market shares
On its own, opting for a pricing method to follow your business strategy is equally difficult and important task. After all, it’s part art, part science. Deciding on the amount you want to charge your customers for your products is a huge step to setting your pricing strategy in the long run. There is no sure-fire way to determine the best pricing strategy for each business but there are some pricing methods and guidelines, which we hope to present with this post, that will ultimately help you make an informed decision because we’re like that, we like to help. Here we go.