You're facing fierce market competition. How should you tweak your pricing strategy to stay ahead?

Sometimes we may, unintentionally, find ourselves in a position where we do not fully understand why exactly our customers choose us over our competitors. The assumptions we have about the value of our products may not fully align with what our customers value about our products. Before considering price adjustments, carry out regular reality checks with customers, to understand where their minds are in respect to what they find important about your products/services, and then, armed with those insights, aggressively increase the value they derive, making your offering increasingly sticky/valuable.

A general guideline I use personally is to use discounts and commercial offers to remain competitive as a temporary measure and as a last resort. This comes with an important caveat, NEVER associate the discount with matching a competitor's price- once a discount is communicated as a benchmark against a competitor, it's almost impossible to undo. I have found that when the market is too competitive and players use discounts, its worth taking a step back and looking at new segments and customer groups to pivot towards. Think McDonalds which has almost transformed it's positioning from being associated with cheap and cheerful drive thrus to a hip lifestyle brand in trendy malls by focusing on a new segment now than it did in the 90's.

Value can be comparative, holistic or unique. The best differentiated value is at an architectural level. It’s not a UI, Press Release or Price Change away. Once you understand that, it’s key to capture how that value shows up in your prospects and customers words. Once you have that and can tie it to how they get to market faster, create competitive advantage, reduce cost or risk you have a good chance of competing effectively or, at a minimum, without rose colored glasses. That learning in the field will help you determine pricing and packaging.

Creating value may be the most underrated yet easily influenced part of the pricing model without sacrificing margin. A company can transform the perceived value of their product or service through the story they tell in presentation or intangibles like customer service (a lost art these days). You can squeeze all the costs out, you can chase competitors, you can lower resale and still not win. Create a need, solve a problem for your customer, and service them like no one else and you can win at a premium.

Its is also very important to benchmark your price with the main market you are competing in.. Select your main direct and indirect competitors and rank your product’s price in relative with the value proposed from you product to that proposed of the competitors to be able to set a realistic costing/repricing strategy

Price wars are not good. Only the customer is a winner in a price war. In wake of fierce competition, one must add more value , more services, bundle offers to navigate through the competition. Pick on USP and hammer on it.

Conduct a thorough analysis of your costs, including production, distribution, marketing, and overhead. Ensure your pricing strategy covers these costs while providing a reasonable profit margin. Accurate cost analysis allows you to set prices that are both competitive and sustainable for your business.

Analysis of the costs of your product should be part of introducing a product to market. You sell the product for what it is worth to customers and make it for as little as possible. These are things to be known before marketing the product. Also an assessment of any cost down measures you can make with volume or adjusting supplier and materials as you go along should also be known about before introducing the product. It means you have somewhere to go in the event of stiff competition when you market the product - or greater margin for the sales you make. Not knowing these things before marketing a product is just asking for trouble

A thorough cost analysis of a pricing strategy is crucial, especially in the consumer goods industry, where margins can be tight. Understanding your product's value proposition is critical to determining the minimum viable price. As a professional with extensive experience in aftersales and business development, I've seen firsthand how crucial it is to factor in direct and indirect costs, such as customer service and warranty support, directly impacting consumer experience and satisfaction.

More often that not you are facing a pricing positioning problem. I had a sales exec tell me 'I never lose anyone on price.' And it's true - you need to position your product to meet the preceived value of the customer. If your customer isn't buying - it's time to ask 'why?' and implement a stronger positioning statement to reflect the product strategy and the expectations of your target audience.

Price positioning is crucial for brand perception and customer loyalty in the consumer goods industry. As a product marketing expert, I've seen that aligning your pricing strategy with consumer experience can significantly impact market share and profitability. It's essential to consider not just the production cost but also the consumer's perceived value. Dynamic pricing and promotional offers can be practical tools, but they must be used judiciously to maintain brand integrity and avoid eroding customer trust.

If you are new entrant into an existant market with well known products you may want to adopt a "buy a slice of the current market" by pricing your product aggressively. Alternatively if your product does more than your competition, marketing that fact with pricing a little above the competition may be sensible. In all cases it means you have to consider where your product sits in the market as to how you can position your pricing and make it work in reality. What value does the customer get by buying your product at your price point. Its easy to fool oneself into thinking that the customer will see the amazing value you ascribe to your product. Most times its about known names, availability, customer service and price.

In a weaker market, products and services often face tough competition. One approach we took was to create a new offering with a lower price point and non-flexible sales terms. When the market improved, we removed the lower-priced option, which helped maintain the value and margins of our original offering.

No mundo de disputa acirrada, monitorar os concorrentes e imprescindível para identificar nossos pontos fracos e fortes para direcionar a negocia??o com foco na qualidade!

El monitoreo a los competidores no sólo debe ser a nivel de precios, sino en función de su comunicación, respuestas y posicionamiento que tienen en tú consumidor y en el mercado. Entender los códigos de comunicación que tienen para presentar los precios nos abre un abanico de posibilidades de diferenciar nuestra comunicación y enganche. No es tu precio, es como logras que la gente te CREA y cuando hay credibilidad, es más fácil colocar un precio. No debemos olvidar nuestro arquetipo de marca

Value-Based Pricing Customer Perception: Set prices based on the perceived value of your product or service. Understand what features and benefits customers value the most and are willing to pay a premium for. Segmented Pricing: Offer different pricing tiers based on the value delivered to different customer segments.

Price is most important but location wise some location price matter but some location in product quality is important And good service

Understand your product or service demand in different seasons and adjust your pricing up for high demand and lower for weaker seasons. The adjustments can be automated using complex algorithms, but manual adjustments can also be effective. If you increase prices, monitor whether orders and sales continue at the same rate compared to previous comparable periods to avoid losing volume.

Promotional offers should be directed by a strategy. Too many promotions, wrong price, inadequate frequency or wrong tactic can have a negative impact and can prevent you from reaching your goal. First you need to define your goal and the scope of this promotion (supporting new product launch, create awareness around a product range, supporting a partner ...) and then align the strategy and monitor.

Product promotions is Important part of product what is different in other company,s products product lunch before not only TV add ruler area on promotion

Protional offers should be used with care in my view, otherwise no-one believes your normal price is realistic. They just wait until the next promotion. Promotions need to project a real value offer not just a price reduction from a high price that few will pay for the product. A 15% price reduction code offer at the and of a transaction rarely does it for me to attract me to buy if I was not already needing to do so. Project real value in a promotional offer.

Over the years I have drilled into my staff that pricing a product is all about the value the customer sees in your product and to ask "what is it worth to him/her to buy your product?". If the considered answer gives you no margin, you have got the product wrong. Generally, I have found that if you have designed your product giving your customer what he NEEDs, "its worth to your customer" gives you ample margin. That's assuming you have paid attention to making for as little as possible of course.

El precio se vuelve subjetivo cuando el consumidor termina evaluando una gran cantidad de factores que le llevan a decidir. Estos factores deben estar influenciados desde lo emocional y qué mejor que contar con ¨complices¨(clientes y no clientes que peuden hablar muy bien de mi marca, mi producto, mi desempe?o, mi experiencia, mi filosofía, etc.). Esta ¨¨ construcción de credibilidad¨ apoyará mi estrategia de precios (ya sea barato, diferente o caro... lo importante es ser ORIGINAL y no solamente DIFERENTE). La estrategia de precios DEBE estar orquestada con la de comunicación

If price is the first thing that comes to your mind in facing competition, you’ve got many more fundamental problems. Are you in a commodity business? Or is your company looked at as a commodity of just another vendor? Do you actually provide value? Do your customers understand the value differentiation you offer? When was the last time you did something innovative in your product or your industry? Figure out why you’re thinking just price will somehow change your destiny if the above topics aren’t addressed.