Why finding competitor pricing information using competitive intelligence is the way forward.
For a new business entrant, pricing the product or service can be overwhelming. Depending on your existing products and those of your competitors, pricing can pose a challenge. So to maximise revenue and profit, you must develop an effective pricing strategy. And this article suggests why finding competitor pricing information using competitive intelligence is the way forward.
How to find competitor pricing information using competitive intelligence
Knowing what works and what doesn’t shows why an effective pricing strategy is important. A company can opt for various pricing strategies based on many factors determining where the focus is. Either units sold, overall market share or pricing to stop competitors from entering a market.
Thus, pricing is a crucial component of competitive intelligence and marketing strategies. The price is the first thing consumers notice about your service or product. And it remains a deciding factor when it comes to making a purchasing decision. So it’s making a pricing strategy error could be disastrous for the product.
Competitor-based pricing method
The competitor-based pricing method is used to test your product pricing and is recommended for those who are new to the market. Requires detailed research on what competitors are offering and at what price to arrive at a pricing strategy. At first, a startup will only supply a few customers, so it’s challenging to understand your ideal pricing sweet spot. And competitive information based on a more extensive consumer base of other more established companies will assist you in finding your perfect pricing fit.
How to find competitor pricing
To make a pricing decision, you must collect and collate competitors’ data and sort it in a relevant, usually ascending order. And this exercise will also assist you in recognising where your brand and product fit within the competitive market.
As you know there, there are two types of competitors: direct and indirect competitors. Direct competitors provide similar services or products for the same value as your product. While indirect competitors offer some products or services that overlap with yours and may also solve the potential customer’s problem.
How to find out competitor pricing
Moreover, some competitor products might have a few similarities to yours but may not even compete with your market. So, after figuring out which competitor group is relevant for you, pricing the products becomes more manageable. After the competitor pricing analysis, there are a few methods to price the product after
Pricing below the competition
Pricing below the competition should be used with extreme caution. And pricing lower than a competitor conveys a message that your product is lacking in some features or services compared to the competitor’s offerings. However, setting a price below the competition could offer a competitive price for your consumers and help grab their attention. It can help increase sales and brand value when you are new in the market.
Pricing on the same level
Pricing on the same level is also called price matching. A strategy where you set the product’s price similar to the market value. However, your focus has to be directed at the added value of your product offering. Features are usually identical to that of competitors.
Competitive pricing analysis
Pricing above the competitor is where your products or services are priced above the current competitors’ prices. This technique is a way to tell the market that your services and quality are superior to your competitors.
Identify opportunities for price increases/decreases
A competitive pricing database can reveal the most advantageous pricing models by uncovering trends in your industry. With the use of predictive analytics, you can adjust your prices before competitors make changes and increase or decrease prices for products strategically to capture maximum market share. Additionally, price benchmarking allows you to compare pricing trends with that of your competitors and determine what actions should be taken to stay ahead.
Establish your ideal pricing range
Establishing your ideal pricing range is a good step when getting started with a competitive pricing database. Gather data such as industry costs, competitor prices, and consumer demand in order to optimize your prices and set yourself apart from your competition. Analyse these factors to determine the best possible value you can offer customers while still remaining profitable. From there, you can use a competitive pricing database to understand better how these variables interact and adjust accordingly.
Competitor price analysis – How to do it right
You should use competitor price analysis to help you decide whether you’re getting a fair deal when buying goods or services. You might not get the best deal if you pay more than competitors.
Identify why they’re winning
There’s no one right way to do competitor Pricing analysis. However, there are some things you need to consider before starting.
- Make sure you’re comparing apples to apples. Ensure you’re looking at the same products with the same features sold by the same company.
- Ensure you’re using the same method to compare prices.
- Check that you’re analysing the same period of time.
- And if applicable, ensure you’re looking at similar times of the day.
Figure out what you can learn from them
If you’ve done everything else right, you should be able to learn something from your competitors, and you might even find out what they’re doing wrong.
Why finding competitor pricing information using competitive intelligence is the way forward
In conclusion, a competitive-based pricing strategy is simple to understand and adopt. Some basic research about competitors helps a long way and aids in recognising your brand value. Moreover, deciding takes only a few hours and involves low risks. As there are already well-known players in the market, the chances are low that your pricing strategy will fail if you base it based on their products. And that’s competitive pricing analysis. And that’s how to find to how to find competitor pricing.
This is a guest post written by Swamini Kulkarni
Art by Becca Tapert
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