It can also be adopted when you want to provide a competitive price for your customers in order to grab their attention, increase sales and your brand value. Pricing below the competition: Pricing below competition shouldn't be a strategy, if at all, you would do so if your product is limited in terms of features and functionality. But here, your primary focus should be on the added value your product has to offer even though your product and its features are the same as your competitors. You price your product similar to that of your competitors. Pricing on the same level: Also known as price matching. It is usually done when you feel the products or services you offer are a notch above your competitors. Pricing above the competition: Offering products or services priced superior to your competitors. There are three methods as to how you can price your product after doing a thorough analysis of your competitors They may be products that might have only one or two similar functionalities as yours and don’t compete for the same market share in a wholesome way.Īfter finding your product’s fit in the market, and accounting for internal expenses such as production costs, you must now understand competitive pricing and analyze how to price the product. Indirect competitors: Indirect competitors offer products or services which will overlap with yours and partly solve the problems in a completely different way. With a competitor based pricing strategy, you have two different types of competitors you need to be aware of while grouping them together:ĭirect competitors: Direct competitors offer similar products or services and compete for the same market share. In order to arrive at a reasonable pricing decision that maximizes profit margins, group your competitors together according to relevance in ascending order and see where your product and brand fits in the range between them. How is competitor based pricing calculated?
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