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 is used by many businesses in order to keep prices low while still making money. It's also known as "price leadership."
Why You Need to Understand Competitor Pricing
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.
Topics: Pricing, Competitor Pricing