Using a pricing strategy based on competition, businesses have three choices when establishing prices for their goods or services: Lower Prices: The prices of your goods or services are lower than your competitors’ prices in your market. This strategy can be lucrative for businesses that are able to capitalize on economies of scale.
Competitive Pricing 1 Understanding Competitive Pricing. Businesses have three options when setting the price for a good or service: set it below the competition, at the competition, or above the competition. 2 Premium Pricing. ... 3 Loss Leaders. ... 4 Competitive Pricing and Price Matching Offers. ...
Once you know the competitors that make up your market, perform a competitive pricing analysis to dig into their pricing models and positioning strategies to build a map of current trends. Make sure to look at not only their pricing but also the way it’s packaged, the types of tiers they use, and the features they differentiate on.