Competitor Pricing | Pricing Strategies | Marketing

Competitor pricing is where a business bases its selling prices on the prices of its direct competitors rather than, for example, its own costs. For example it might try to "price match", or aim to offer lower prices than a competitor.

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VIDEO CHAPTERS
00:00 Introduction
00:12 What is competitor pricing?
01:33 Advantages of competitor pricing
02:48 Drawbacks of competitor pricing

VIDEO SUMMARY
This video is about competitor pricing, a pricing strategy that is based on competitor prices rather than other factors such as the costs of actually making or buying the products.

The video discusses the advantages and disadvantages of competitor pricing.

Competitor pricing can be a good way to remain competitive in a market where consumers have lots of choices. By setting your prices similar to your competitors, you can avoid the risk of being too expensive and losing customers to competitors. Competitor pricing can also be used as a defensive mechanism to protect market share and boost gross margins.

However, there are also some downsides to competitor pricing. If a business has different costs compared with the competition, then basing their prices on competitors could mean that they earn a lower profit margin. Additionally, if competitors have got their prices wrong and are setting them at an unsustainable level, then a business that follows competitor pricing will simply be replicating their mistake.