This strategy is primarily used in the technology or video game sectors.įocus on the competition when discerning which price to set is a viable choice. Price skimming is a pricing strategy that consists of establishing a high initial price for a product and, over time, lowering that price to reach more areas of the market. Setting prices above those of competitors is a double-edged sword: while in the long run you can establish your brand as a prestigious one, gain importance in the marketplace and quickly recover your investment, users may respond negatively to a price increase and that aspect will undoubtedly affect your sales. In order to implement this strategy without fear – be careful not to spoil the profit margin of your products. This is a viable method for businesses with a large number of products or physical stores of large surfaces. Simply by setting prices lower than the rest of your competitors. This strategy is valid in the long run, because when your e-commerce is established in the market, you will be able to raise prices to increase your profit margin.Īnother strategy for pricing below the competition is discounted pricing. Penetration strategy consists in entering the market with prices significantly lower than the competition in order to gain more customers and thus increase market share. Underpricing the competition with a competitor-based pricing strategy This strategy can also be used in markets or verticals where products are priced in the usual way, for example: bread or eggs. Setting prices at the same level as the competition occurs when the difference between your product and the competition’s is zero or almost undifferentiated. Parity pricing with a competitor-based pricing strategy In this post we will look at the methods of competitor-based pricing. To do this efficiently you have competitor price monitoring softwares that allow you to create automatic connections from the EAN code of the products.Ĭompetitor-based pricing is one of the basic pricing methods, along with cost-based pricing and market-based pricing. So, if you want to use this strategy you must be sure to know which are the competing products. To set the price of a product using competitor-based pricing you must find the rival product that is exactly the same. However, this strategy does not cover initial costs and only takes into account the selling price of the rivals’ products. ![]() As the name suggests, competitor-based pricing is a pricing strategy in which a company sets the price for its products after observing the competition.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |