If you are trying to make a name for your brand, then pricing is one of the most important decisions you have to make. One popular pricing strategy is competition-oriented pricing, where you set your prices based on your competitors'.
Competition-oriented pricing (COP) is a pricing strategy where you set your prices based on those of your competitors. It is also called market-oriented pricing or price leadership.
Competitor analysis is crucial when designing a COP strategy. First, identify your major competitors in the market from both direct and indirect channels. Next, study their pricing mechanism, their product quality and features, and their distribution channels.
Positioning is critical in competition-oriented pricing. You want to set prices for products that offer better value than your competitors' products. To achieve this, find out what features or benefits customers feel are essential that competitors do not offer.
Market research can help you determine whether COP works for your business model. You can analyze the effect of fluctuating market trends on sales volume and revenue while also assessing customer satisfaction with provided services.
Optimizing marketing strategies by aligning with the strategy adopted can refine COP efforts, making it an effective way to provide customer satisfaction while achieving maximum profit margins.
COP can be employed when there are many players of the same product or assembly or when a company aims to gain or maintain substantial market share under intense competition.
Pricing strategy remains an essential component of every business's plan today as every company wants to remain relevant across profit-making ventures; get insightful knowledge about becoming competitive by getting books such as "Pricing Strategy: Setting Price Levels Managing Price Discounts," "How Customers Think: Essential Insights into the Mindset Behind the Buy," and e-book materials like "Market Research Handbook."
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