When thinking about establishing a business your main question would be “Does the price of my products matter?” You may question yourself if you should compare your prices with the ones of your competitors. Also, you have no idea if your competitors have an image of the prices you ask for your services. If you run an online company, you do not know based on what you can determine the correct price for doing your business. Well, you should know that you should pay increased attention to competitive pricing analysis because it will help you understand the amount of sales you are losing because of the prices you are asking for your products and services. Competitive pricing monitoring is one of the tools great brands use, and in this way, they are able to maintain their sales, and even increase them. If you set your prices based on the prices of your competitors, you will have a profitable business in no time.
Is it worth gathering information about competitors’ pricing?
If you have an online store for example, you should know that customers start their search by comparing prices provided by similar retailers. This analysis leads them to the prices of the products they are looking, and according to the offers, they find, they decided from which one of the retailers they will buy. Customers have told companies in numerous occasions that they are buying the price. So you have to know if your price is lower or higher than that of your competitors. If you want to win the sale, you have to conduct an analysis to see if yours can charge enough difference.
Should you monitor only the leader from the market?
It would be a big mistake if you would ignore the other competitors and you will monitor only the leader. If you are an online retailer, you should look at a great number of your competitors’ prices, because you have to get an idea on how the real market looks. You have to understand that the majority of online retailers are competitive, savvy and experienced and they know how to quantify the value of their products in the price their ask.
Should you ignore your competitors’ pricing if you have an effective business strategy?
When you establish a business in the online medium, you must base your business strategy on the price. You have to have a clear idea about the price your competitors are asking, and how they motivate their price. In case, in the industry you are working, there is no market leader, then you have to analyze the pricing models of the other retailers and understand why they are asking that exactly sum for their products. In this way, you will know what you have to do to differentiate your products and services from the one of your competitors and how to defend your pricing model. At the end of the day, there are customers who are buying considering only the price, but there are also people who decide according to the connection between price, credibility, quality and brand.