There is a real danger in “race to the bottom” pricing – basically, no one wins. 

By automatically diving to the bottom price all you’ve done is dented your profit margin and your reputation – and lowered the perceived value of your product. 

Competitive-based pricing, or market-oriented pricing, involves setting a price based upon an analysis of what the competition is up to pricing-wise. You can choose to price-match - or price your goods higher or lower, dependent on what your overall business goals are and how you wish your product to be perceived.