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Competitive Price Comparison

 

DisciplinesMarketing > Pricing > Competitive Price Comparison

Description | Example | Discussion | See also

 

Description

One method in displaying prices is to compare the price of your product with that of competing products. Show competitor price followed by your price (make your price larger).

This is particularly useful when you have a lower-price philosophy and hence compete to a significant extent on what you charge customers. Even if you sell high-quality/high-price, you may find a price advantage by doing a 'lifetime cost' comparison.

You can also be creatively selective in how you display prices, although be careful with this as customers who detect deception may react by not buying and permanently downgrading their perception of your brand.

Example

A white goods manufacturer just entering a market runs a 'better value' campaign, including detailed comparison charts and showing equivalent competitor prices on price labels.

A sales person says 'If you buy the Blumco XYZ, you'll get the same functionality, but for nearly twice the price.'

Discussion

When people look at the price of something, one of their early questions (beyond need and desirability) is about value. The way we make many decisions is through comparison and contrast. By showing a comparable product, you force customers to focus on price as the only differentiator.

Showing the competitor price first sets expectation, so when the customer comes to your price (even though it is only a second later) they are pleasantly surprised and immediately consider your product to be good value.

Be careful when promoting your products as being inexpensive as the Price-Quality Heuristic can lead customers to assuming that you also have lower quality products. This effect can be offset by comparing your products with those of a strong brand which is recognized as having high quality

See also

Competitive Pricing, The Price-Quality Heuristic

 

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