Pricing Strategies:

Competitive Pricing


Use your competitors price as the benchmark and undercut it. Many businesses make this the core of their marketing ethos and become famous with slogans such as “If you find a cheaper price, we’ll beat it by 10%!”

This strategy captures price conscious consumers, but can have the obvious negative impact of generating a “a race to the bottom” as competitors try to outdo each other.

Pros: Can become a point of differentiation if you can sustain it. Can also be used to negotiate a lower cost with your suppliers whilst cutting costs and actively promoting your special pricing.

Cons: Lower Prices=Lower Margins, which puts the onus on you to make this up by shifting more stock. This is not a great option for smaller players, and as such is often not a viable strategy for them. Also, depending on the product, customers may not reach for the cheapest product on the shelf.

See the other Pricing Strategies