Three Ways to Judge The Impact Of Competition On Pricing Strategy
You need to know the impact of competition on pricing strategy i to price your product competitively. This requires comparing and contrasting your products to your competitors’.
A lot more goes into determining a product’s price than just the product. The manner and speed of delivery, the way that customers are served, and the product guarantee contribute to the price that customers are willing to pay for your product.
It would take more than reasonable article length to cover all of these. So instead this article will cover only price range, product features and target market.
To make these points easier to understand, I’ll discuss one of my products as an example.
Impact Of Competition On Pricing Strategy: Determine The Price Range Of Competing Products
You’ve to know how your competitor’s price their products and the range between their prices.
Knowing the price range of competitors’ products will help you to determine what you should charge for yours.
For instance, I did some research on Amazon.com and discovered that the competition for my market segmentation book ranges from $6.95 to $159, with a median of $82.98. So I know to price my book somewhere in this price range.
You need to discover the price range of your competitor’s products as you determine your price. Whether your price should fall on the low or high side of the price range for competitive products depends upon your product’s features compared to your competitors’. It’s also influenced by your target market.
Impact Of Competition On Pricing Strategy – Determine The Features Offered By Competing Products
The second impact of competition on pricing strategy relates to features.
Now your research should go beyond core features. Customers anticipate all products to have core features. To get more than the minimum price, your product should provide at least one feature that makes it different from all competitive products.
For example, any book on market segmentation should cover basic market segmentation information, including what it is, what it does, its benefits, and basic criteria for conducting market segmentation research.
So for my book to sell, it has to provide something different. It provides detailed and thorough information on market segments that can be used by laymen to get professional results. Unlike many market segmentation books, it requires no statistics and uses a easy process. That makes it different and provides a selling feature.
Impact Of Competition On Pricing Strategy: Know The Market That Your Competitors Are Targeting And Target A Different One
The third major consideration regarding the impact of competition on pricing strategy is the target market. The product’s intended users determine the price for a product because some target markets will pay more than others. And you can always sell a product at a higher price if its designed for target market.
If you select a target market not served by your competitors. and design your product to meet your target market’s needs, you can charge more.
For instance, the target market for most market segmentation books are either student or professional marketers, managers of big businesses, or businesses in a big industries.
Small business owners just aren’t being served well by these competitive market segmentation books.
Impact Of Competition On Pricing Strategy: Synthesis
By knowing the range of prices for competing products, the unique features of each, and target markets, you’ll be much better prepared to price your product.
For instance, I considered price range, very special features and target market in determining the price for my market segmentation book. I aimed for the median price because my book provides features not offered by competitive books. Then I adjusted that price lower because small business owners have limited income, and my book is provided as an e-book.
If you use the information in this article, you can also set a good price for your product by noting the impact of competition on pricing strategy.
You can determine the impact of competition on pricing strategy by determining how your competitor's products compare to yours....
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