Competition-Based Pricing

Competition-based pricing is a strategy where a business sets its prices primarily by looking at what competitors are charging for similar products or services. Instead of focusing solely on costs or customer willingness to pay, the company adjusts its prices to stay competitive within the market. This approach helps attract customers by offering prices that are neither too high nor too low compared to others. It’s commonly used in industries with many similar options, ensuring the business remains appealing while maintaining profitability.