Setting Profitable Prices: A Step-by-Step Guide to Pricing Strategy--Without Hiring a Consultant, + Website

Chapter 3

Analyzing Your Competitors’ Prices

In-a-Rush Tip

Do not skip this critical chapter or the worksheet for it. But if you are in a rush, you can narrow your focus to your three or four primary competitors and your primary products.

Warning: By limiting yourself to fewer competitors, you will miss out on uncovering some add-on opportunities for extra profits for your product/service.

Before you ever launch your new product, consumers have expectations about what your price should be. Those expectations come from what your competitors charge for their products. You need to know those expectations.

You Do So Have Competitors!

I’m always surprised at the number of entrepreneurs who believe their product is so different they don’t have competitors. Every product sold today has competitors.

Proof that everyone has competitors:

The marketers who launched the Segway motorized scooter a few years back probably had more reason than most to believe they didn’t have competitors. But they did. Their competitors are anything anyone buys that will make going short distances easier and faster.

Segway competitors listed in order of price consumers pay:

• Skateboard
• Rollerblades
• Bike
• Motorbike
• Motorcycle
• Golf cart for in-town use
• Car

How to “Pick” Your Competitors

Sometimes you can get customers to accept a higher price for your product by “picking” your competitors.

For example, business ...