Business

How to properly collect data for analysis and develop a competitive pricing strategy

Studying the prices of your competitors in the market is the only right decision that will help you set your own adequate prices, increase profits and form a competitive basis for other businesses in the supply market.

The study of pricing for the competition is based on an analysis of historical pricing, as well as by surveying consumers and their reactions to new prices. Usually, the prices that are presented to the public do not include the costs spent on production, as well as the likely income for the enterprise. At the stage when the survey was conducted, pricing specialists can calculate the optimal favorable price that will not affect the opinion of consumers, and will also bring a profit.

All companies that have many competitors in the market try to rely on the real prices of their competitors. Based on the analysis of competitors’ prices, the company can draw up the most favorable offer both for itself and for consumers. Thus, companies develop a competitive pricing strategy. Not all companies begin to develop this strategy at first, many begin to think about it only when their offer, where you can get profitable income, is not in demand.

Today, in a world where there are a huge number of stores and marketplaces, it is difficult to find a unique product. That is why consumers know that they can find the same product in different places and at different prices. Nobody wants to overpay and in this regard, buyers try to look through the offers of different companies before buying and then choose the offer that suits them.

How to do quality research on competitors’ prices

1) Collect a large amount of quality information

To start developing a strategy, you need to collect accurate and comprehensive information. The following criteria will help you understand how high-quality your information is:

– Multifaceted product criteria. First of all, it is worth collecting data based on various characteristics of the product, such as color, functionality, size, and other parameters.

– The relationship between expected data and available data. Competitors do not always provide complete product information on their web pages. This can negatively affect the quality of the comparison information.

– Collect only the latest information. Collect information from competitors just before you start analyzing.

2) Make a list of what parameters you will take into account

Use the following parameters:

– Price index. This parameter helps to determine the level in the market that your competitors are at for a certain period. This indicator will allow you to establish what conditions affect the number of goods sold and the setting of prices.

– Discounts and promotions. Most buyers are guided by affordable discounts and promotions. This allows you to increase your sales. In this regard, you should look at what advertising offers exist on the market and make your own.

– Limited stock of goods. The unavailability of a product is also of great importance when setting prices in a certain period of time.

Before you start collecting data, you need to determine your place in the market and make sure that you thoroughly know the niche you work at. The above parameters are the main criteria for the analysis.

3) Analysis of competitors

After collecting information, it is necessary to analyze your competitors. Competitors can differ in the audience to which the products are directed and in the quality characteristics of the products. Depending on this, there are the following types of competitors:

– Direct competitor. This type of competitor has the same target audience.

– Competitors whose assortment consists either only of high-quality products or low-quality ones.

– Competitors who are indirectly related to the retailer’s products. Thanks to them, you have a chance to increase your assortment.

By basing your analysis on these competitor categories, you can identify your competitors and set an accurate competitive price.

Competition is not about adopting permanent terms and strategies. It is important to understand here that, just like you, your competitors are constantly analyzing the price market and therefore immediately change their pricing policy. Therefore, in the long term, it is necessary to constantly collect data and develop new strategies.

4) The use of machine tools in price research

It is quite difficult to process data manually. While your team is exploring some data, everything in the market may already change and your analysis will not make any sense. That is why it is most convenient to use machine methods. First, they do price monitoring more accurately. These methods can process a large amount of information at a faster rate and provide a recommendation for setting prices.

The main advantage is that machine data processing allows you to remove simple tasks for the team so that they could put all their efforts into drawing up a detailed and structured plan. Moreover, they gain more time to provide competitive prices on the market in a short time.

Many business owners are reluctant to use this method because they believe it will entail high costs. Everything is exactly the opposite. Companies that already use automation claim to have reduced processing time by 50% and also reduced costs.

5) Monitor changes in the trading of your competitors online

In order not to lose vigilance and be aware of everything that is changing in the work of your competitors, try to constantly monitor changes on sites and pages in social networks.

Keep track of the following information at all times:

– Product cards;

– Presentability and design;

– Reactive updates;

– Optimization for smartphones and tablets;

– Response speed.

When researching, try to view your competitors as ordinary consumers and think about what attracts you personally to their offerings and how you can improve your business processes.

Conclusion

These points are great for how you can learn how to properly analyze large amounts of data and develop competitive offers and pricing promptly. When creating your own pricing policy in a competitive environment, it is necessary to comprehensively process data and, on their basis, actively participate in the pricing process.

Christopher Stern

Christopher Stern is a Washington-based reporter. Chris spent many years covering tech policy as a business reporter for renowned publications. He is a graduate of Middlebury College. Contact us:-[email protected]

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