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Price Intelligence: A Clever Way To Avoid A Price War

August 19, 2012
Written By

With just a little effort, you can turn your competitor’s low prices into a competitive disadvantage to grow your own sales and profit margins.
Keeping prices slightly higher than your rivals while still increasing sales is every retailer’s and manufacturer’s dream scenario.

When you and your competitors offer a similar product or service to customers, they will go for the one that is cheaper. To get around this, offer a third product or service with a higher price than your original price and the competition’s price. Going by consumer behaviour to date, the shopper will usually choose the product with the middle price instead of the cheaper option.

For example, if you offer a product or service for €475 and your rival is selling a similar deal for €450; by dropping your price below €450, you will kick-start an unwanted price war.

A better option is to offer three versions of your product or service: €450, €475 and €500. Name the alternatives appropriately e.g. Silver, Gold and Platinum options.

When a potential customer highlights your competitor’s product or service as being cheaper than yours, you can say that your Silver option matches the rival’s price. The customer will now view your rival as the cheap alternative. In most cases, the customer will go for your Gold or Platinum deal.

This pricing intelligence works best for customers who are not carrying out a great deal of research on your product lines. For others, highlight your unique selling point to ensure they ignore the alternative lower price and choose your option instead. With the use of competitor price monitoring and price intelligence, you will grow sales and profit margins instantly.

© Profitero 2012

About Profitero

Pricing intelligence company Profitero provides retailers with actionable price intelligence data, monitoring over 50 million products across 4,000 eCommerce retailers every day, observing pricing, promotions and stock availability. We work with the world’s leading retailers, enabling them to acquire new customers and grow profit margins by monitoring and responding to changes in competitor pricing and promotional activity as they happen. For more information on Profitero price intelligence and competitor monitoring, visit or email

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