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Competitor pricing strategy9/17/2023 ![]() One amongst the herd - Since it’s a strategy implemented solely based on your co-market players you will not be seen as different and will be a part of a huge herd offering the same products and services.This might take a hit on your profits and revenues in the future. Because, if they went wrong, you go wrong as well. Can’t see the wood for the trees - When you’re implementing a competitor based pricing model you’ll be missing out on details which your competitors might have.This is a model attributed to short term goals and you’ll be casketing your profits in the long run if you follow the same because as you scale you need to evolve your pricing strategy based on your product and not based on what someone has to offer. Unsustainable strategy in long term - A competitor based pricing strategy can sustain during the initial stages of market entry but as you progress you cannot use it as your competitors might be improvising based on the pricing data or might change pricing completely with a change in marketing strategy to focus on different market segment.By combining two models you’ll be aware and sound of the market and can stay ahead of the competition and cover your costs.ĭisadvantages of competitor based pricing But, before arriving at a final price solely based on the above two models, you can compare yourself with the competition and modulate your pricing a bit in order to be in-par with your competitors. Used in conjunction with other pricing strategies - A company can calculate their pricing based on a value based model or a cost-plus pricing.Low Risk - Since your competitors are well-known players in the market and have been around for quite some time, the chances are slim that your pricing strategy might go wrong if you base it according to them.It takes only a few hours to arrive at a decision for the same. Simplicity - A competitor based pricing model is very simple to implement as it requires basic research and insight into who your competitors are and what they’re doing with product and prices. ![]() 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.
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