Competitive pricing analysis is a crucial step for businesses selling similar products. It includes gathering and analysing data about your competitors' pricing strategies. This helps you gain insight into the market and set the right prices at the right time.
This blog post will tell you how to do a competitive pricing analysis.
What is Competitive Pricing Analysis?
Competitive pricing analysis is a process where you gather and analyse competitor data. It helps you identify your competitor's strengths and weaknesses. Then, you can use that information to set new prices. You can even set higher or lower prices than your competition based on your strategy.
Moreover, to conduct a competitive pricing analysis, businesses start by:
- Identifying their direct and indirect competitors. Then, gather data on their pricing strategies using web scraping tools. Price tracking tools like SYMSON can track competitors' prices and provide real-time updates;
- Doing a competitor price comparison to get a better picture of price changes across brands. You can get a better overview using a competitor price comparison software.
- Analysing the data to identify patterns and trends in their competitors' pricing strategies. They look for pricing premiums, promotions, volume discounts, and bundle pricing.
- Determine their pricing strategy. Then, you can price products higher or lower than the competitors'. You can also consider product differentiation, cost of goods sold, etc. to set new prices.
Better yet, let an AI pricing tool do it for you. With tools like SYMSON, you can also predict future scenarios and demand.
Likewise, you can prepare way before time and always stay above in the market. Competitive pricing analysis is an ongoing process that requires monitoring competitors' pricing strategies. This allows businesses to stay up-to-date with market behaviour and changes. When competitors raise their prices, failure to act on such opportunities could lead to leaving money on the table.
How to Do a Price Comparison with Competitors?
It's easier to compare when you can see all your competitor's prices and the changes in one place. But first, you must also consider regional/local brands for comparison. This way, you can tap into the regional behaviour and trends before repricing.
The manual way of comparing prices in a spreadsheet is time-consuming. Not to mention, this process breeds inaccuracy. A better way is to use a competitor price comparison software like SYMSON. It shows an overview of all their pricing affairs in one place.
Also Read: The advantages of competitive pricing for B2B companies.
Here's how to do a price comparison with competitors using SYMSON:
How to Conduct Competitive Pricing Analysis?
Here's how you can compare prices with competitors and set the right prices.
Also Read: The 3 pricing factors of competitive pricing.
Step 1: Identify & Categorise Your Competitors
The first step of a competitive pricing analysis is identifying your 'real' competitors. Most businesses mark overseas brands as competition but miss out on local ones that are direct competition.
That is, find companies that offer similar products to yours and serve the same target market and region. Now, you may have already identified your competitors. So, you would need to categorise them.
Look for direct competitors who offer the same products or services as you. You can also consider indirect competitors. Ones who offer similar products or services but serve a different target market. Most businesses already consider this.
- Primary competitors: Competitors who serve the same audience as your business.
- Secondary competitors: Competitors offering a high-end or low-end version of your product assortment.
- Tertiary competitors: Competitors serving the same audience but offering a product/service related to your brand's products. Such a group can be a potential business partner or a future competitor.
Upon categorising competitors, businesses find it easy to analyse direct competitors. It is a crucial step while conducting competitor pricing analysis. They can also consider secondary competition in the long term. Then, prepare to partner with or compete with their tertiary counterparts. A competitor pricing tool helps define and categorise competition even better. After all, there are several pricing strategies to experiment with for optimal prices.
Besides, the market environment for each product is changing. This makes it more necessary to combine different pricing strategies to remain agile. Agility is a powerful strength to have as a brand when you're looking to grow. So, pricing tools like SYMSON could pave the way for you.
Step 2: Determine Data Quality and Gather Pricing Data
The next step is to define relevant parameters of competitive pricing data. So, you can start gathering the information. Here are some aspects you can consider for starters:
- Product availability: Studying the availability of competitors' stocks helps price better. If the product isn't available with competition, you can price higher. You can understand the supply of the product category for this.
- Competitor's extra offers: To be on par with your competitors' offers is crucial. You can track discounts, promo codes, and other recommendations. This insight will help you introduce different offers that attract your target audience.
- Price index: This tracks the company's market position for a particular product category or service within a period.
You can collect pricing data by:
- Visiting competitors' websites and physical stores
- Purchasing their products
- Using price tracking platforms for real-time updates
For an effective competitor pricing strategy, it's crucial to gather accurate data regularly. This ensures you always have the most up-to-date information.
Step 3: Analyse Pricing Data
After collecting pricing data, the next step is to analyse the data. In this step, you must look for patterns and trends in the data. This will help you identify the pricing strategies your competitors are using. For example, are they pricing their products at a premium or a discount? Are they using promotional pricing or volume discounts? Are they offering bundle pricing?
Look for the strengths and weaknesses of your competitors' pricing strategies. Also, you will find different information that will help you position yourself. Understanding patterns in their data will help you identify their next move. Likewise, you can prepare to stand out.
Step 4: Determine the Pricing Process using Pricing Data
The next step in competitive pricing analysis is to track pricing data on an ongoing basis. Keep an eye on your competitors' pricing strategies. Understand their motivation and adjust your pricing strategy as needed. If your competitors lower their prices, most companies lower their prices too. But not always. You may have a solid value proposition that doesn't need you to lower prices. If your competitors raise their prices, you can also increase them. Keep an eye on market trends and adjust your pricing strategy according to that.
Step 5: Conduct a Smart pricing Analysis using reliable AI-driven Pricing Platforms
You must follow the process to maintain accurate data to set competitive prices. But, manual ways of market research, data scraping, and price analysis can take forever. Plus, timing is crucial in a competitive market. To combat all such human errors, today's enterprises rely on AI-driven competitive pricing solutions like SYMSON. Such tools automate competitive pricing analysis and suggest optimal prices. It leverages mature data quality, collects competitor data through API and provides recommendations. Below are a few features you can find in a decent-quality pricing platform:
- Conducts comprehensive competitive market research
- Leverages mature data quality
- Scrapes accurate data from competitors
- Provides optimal price recommendations
You can watch our videos on how to build pricing strategies for a better understanding.
How does SYMSON's Competitive Pricing Solution Work?
Symson allows you to compare all your competitor prices, analyse and suggest new prices in minutes. Many businesses face a challenge in finding competitor prices from marketplaces or websites. For this, some use price scraping tools. But it's difficult to integrate the data into your price management tool. Symson solves this problem as it's an integrated pricing platform. All your data is centralised and accessible to any team.
Responding to real-time market changes is not enough. Today, you must prepare for the future. That's why it's important for a pricing tool to have the ability to predict future scenarios and act upon them. In Symson, you can predict demand after setting a scenario. Check all our solutions so you can make your pricing more agile.
Do you want a free demo to try how SYMSON can help your business with margin improvement or pricing management? Do you want to learn more? Schedule a call with a consultant and book a 20 minute brainstorm session!
