3 Ways Monitoring Your Competitors Prices Can Be Used For Marketing
Should I monitor my competitors’ prices?
Believe it or not, thousands of business owners have asked this question while lying in bed at night. Over the years, there has been a lot of debate over the concept of competitor price monitoring. While others see it as a handy tool for running and improving their business model, others might see it as an illegal means of determining prices.
However, the truth is that price monitoring is a beneficial tool for marketing. If you’re looking for a new marketing approach for your business, you can glean some insights from monitoring your competitors’ prices.
In this article, we’ll have a closer look at how competitor price monitoring can be used for marketing. Let’s get down to brass tacks, shall we?
The Benefits of Competitor Pricing Analysis and Monitoring
Here’s the big question: why should you even be monitoring prices in the first place? Well, here are some core benefits of this approach:
It helps you draw in more prospects
Have you ever looked at a product in the supermarket and put it down because you saw a cheaper one? Or have you ever tried out a new essay writing service because you heard about its mind-blowing offers? We’ve all been there.
The truth is that a large percentage of consumers worldwide base their purchase decisions on pricing. If it’s cheaper by one dollar, throw it into the shopping cart. If it costs one cent more, it goes back to the shelf.
Thus, monitoring your competitors’ prices can help you create an effective price-based marketing strategy. This way, you’ll be able to lure new prospects with great prices and mind-blowing deals.
Allows to practice pricing compatible with your market
Pricing might seem simple at first glance, but in reality, it can be very tricky. It’s more than just slapping a random hashtag onto an item. If your prices are considerably higher than your competitors’, you will scare customers away.
So the best step is to make sure your prices are incredibly low, right? Wrong. Offering prices far below your competitors’ could affect your brand’s value and make it seem inferior to the rest.
By monitoring your competitors’ prices, you get to know the recommended minimum prices and can then set your price in line with them. This way, you won’t lose sales or discredit your brand’s value.
Helps identify ground rules for lowering or increasing the prices of products
Competitor price monitoring and analysis doesn’t just involve recording prices; it also involves taking note of competitors’ promotions, payment terms, and product mix. This way, you’ll know the right time to lower your prices and which products should take the fall.
For instance, if your competitors launch offers or discount sales, you can anticipate how this move will affect your business and launch a promotional action as well. In the same vein, when any of your competitors are out of stock, this might be the best time to raise the prices of items in your store. A 20% hike in price is great for business. After all, the aim of this price hike is to earn a little more in the profit margin. Just remember to lower the prices once your competitor bounces back.
How to use price monitoring for marketing
By monitoring your competitor’s prices, you can get the right insight for building a foolproof marketing approach. Now that we’ve already established the importance of competitive monitoring, it’s time to explore how you can use this concept to create an effective marketing strategy. Let’s take a look at the following tips:
Beat the brands that sell highly-valued products and services
The Nike Air Vapormax Flyknit 3 is a relatively expensive shoe that goes for about $190. While $190 might seem like a huge amount to spend on a single pair of sneakers, you’d hardly find anyone complaining because, well, it’s Nike. Although smaller brands will find it difficult to sell one shoe if they slapped that price onto their products, Nike can get away with it because of its value.
So, here’s the bottom line: highly-priced products are often valued because of their superior quality, customer services, and top-notch marketing. If you’re looking to draw in more customers as the bigger players do, you’ll need to beat them by emphasizing your product’s quality and lower prices. Remember: people are always looking for cheaper alternatives, and since you can’t join the bigger players, you’ll have to settle for beating them.
Create the right market-based product pricing strategy
Monitoring your competitors’ prices gives you a rough idea of the market price criteria. Thus, you can decide on the best product pricing approach to use when launching/marketing your product. It’s important to note that there are different market-based pricing approaches and your choice largely depends on existing market prices and your business model.
Some of these pricing approaches include:
- Penetration pricing: Penetration pricing is a great strategy for new businesses and products. If you’re launching your brand or product into the market, your main purpose should be to garner customers’ attention, and the penetration pricing strategy helps you do this. It involves setting low prices when a product first emerges into the market. Setting low prices will help the product stand out from the competition, and once it has garnered sufficient attention, the prices can then be increased.
- Price skimming: The price skimming strategy is often used by businesses that want to seem superior to their competitors and yield maximum profits. It involves pricing a new product significantly higher than the competition to make it seem like a luxury brand. This would attract the attention of luxury shoppers, and once they’ve satisfied this first set of consumers, the price is lowered to attract the more price-conscious consumers.
- Value-based pricing strategy: This is a model by which a business prices a product based on its perceived value in the consumer’s eyes. Here, the customer’s interest (rather than the competitor’s price) is the highest priority.
Create a strong value proposition
Creating a strong value proposition can be difficult for many brands. However, price monitoring can give you fresh ideas for your value proposition. After analyzing your competitors’ prices, you should consider a value-based offer to include in your marketing approach.
For instance, your value proposition could be that you offer high-quality products at lower prices than your competitors. Some brands often show a side-by-side price comparison when marketing their products or services. A note of warning though: this is only attainable if your prices are lower than your competitors’.
How can you monitor competitors’ prices?
Suppose you’re looking to try out competitor price monitoring. In that case, you can do this manually by making a list of all your direct and indirect competitors and then check their websites for pricing. However, the best way to effectively monitor prices is by using Price2Spy. Our price monitoring solution offers you in-depth reporting and price analytics with a seamless experience.
In today’s world, competitive pricing intelligence is a handy tool for marketing, especially for new brands or products. This concept will help you “spy” on your competitors and gain insights that will drive your next marketing approach. Ready to start your competitive tracking journey? Let’s begin.
Amanda Dudley is an essay writer and lecturer with over ten years of experience in the academic sector. She has a Ph.D. in History from Stanford University and is considered an expert historian and educator. Amanda currently works at EssayUSA, a reputable essay writing platform specializing in creating stellar academic papers and dissertations.