Pricing of products is one of the most difficult and yet most important aspects when running a business.
For both producers, and e-shops. Price optimization and skillful price management are what impacts the company’s revenues and profits. There are many pricing strategies, one of them is competitive pricing. What does it mean and how to use it effectively?
Competitive pricing is a method of pricing an item based on other competitors’ prices. The practical implementation is based on the search for optimal price points in relation to other products available in the market. It allows you to do two very important things. First, positioning in accordance with market trends and second, setting the price level lower or higher than the competition. It is an opportunity to build your company’s imageo – it can be perceived as an economic or premium brand. Moreover, the seller has the opportunity to optimize the offer in relation to competitors. Competitive pricing is used especially when the marketed product already has substitutes and it is easy to compare offers.
Competitor price monitoring and pricing
If you run an online store or if you are a manufacturer, it is important not only to track the prices of your own products, but also to observe the offer of your competitors. Comparing other products on the market allows you to optimize your offer more effectively. The right information is best obtained by automating price monitoring, as manually monitoring all stores and online sales platforms is difficult, inaccurate and time-consuming. Automatic ecommerce price monitoring can streamline this process.
How to use dynamic pricing?
Competitive pricing also provides assistance in pricing new products. The advantage of using this method is the fact that manufacturers who have entered the market before have already tested certain price points and have most likely already established an optimum. Additionally, this allows you to start optimally pricing your products relative to your competitors.
For retailers it is also important to maximize profits by constantly adapting prices to the current market situation. Dynamic Pricing allows you to automatically and almost immediately adjust prices to changes in the offer of your competitors. Its application hastens the response time to steps taken by other players, and thus helps to optimize the offer. The introduction of dynamic pricing is an important step on the way to effective price management and maintaining competitive advantage.
If you are looking for a proven tool for effective price monitoring and automation,you can check Dealavo price monitoring. They will walk you through all the features of the platform that will best meet your business needs and show you ways to effectively manage your pricing to help you maximize profit.