This information helps you build a clearer picture of the market.
Can you find out price and promotional information about competitors for example? Can you find out when and how often competitors advertise? Or how widely distributed they are? The more information you have, the more you can analyse what’s happening. Or in some cases, you can access it through third-party research companies like AC Nielsen or IRI Worldwide.īut look at other information beyond total sales. This sales data may be available as part of your retailer agreement. This gives a better indication of actual shopper demand as your sales to the retailer will be subject to their stock levels.
Where you sell through retailers, aim to get hold of their sales data to the end customer where possible. One obvious measure to track is sales. Both your own and those of competitors.ĭepending on the industry, you can check and evaluate sales either daily, weekly or monthly. So, free delivery for online shopping in this case. So, securing more in-store space when we have a promotion that will run through more units, or running a specific promotion through only one channel or one customer. In this case, we would also detail any additional benefits or limitations to the promotion. In this example, we would never be more than $10 more expensive than Competitor B. So we might set a cap of how much more expensive we would ever be than them. So our price plan is to maintain a 10-15% price discount at all times.īut we also recognise that a lower quality cheaper competitor (Competitor B) might start to take volume share from us if the price gap is too wide. In our hypothetical T-shirt example above, we might be a #2 player in the market looking to take volume share from the #1 (Competitor A). Work with your finance team to look at different P&L scenarios based on volume and price forecasts.
Use market research and feedback from the sales team and customers to help decide on the ideal price point. The price point you choose positions your product against competitors. (known as cost leadership – see out article on competitive strategy for more on this). On the other hand, if you decide you want to appeal to the greatest number of customers, a lower price point would be more appropriate. Customers expect to pay more for better quality products. This depends on your positioning statement and how your target audience perceives price.įor example, if you position your brand as delivering the highest quality in the market, the implication is you’ll be the most expensive product. Your second price consideration should be how you price relative to competitors.
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