Know-How Exchange : Research/Metrics

If you don't know exactly what management is truly looking for, then you're simply guessing on what would satisfy them. Better to get (or develop) a clear specification of your deliverable, with specific questions like you've pointed out, and have them sign off on it.

I agree with Jay. In addition, merely looking at competitor pricing isn't enough. Sure, it's important to make sure you aren't way higher priced than your competitors, but when a person comes to your site they want to immediately know that you have what they need, that you're trustworthy, and that you are somehow better than the competition (faster, cheaper, 100% guarantee, etc., etc.). If they can't answer those few questions immediately, they'll most likely leave. Running usability studies - online and in-person - will help a lot. Also, adding a temporary one- or two-question poll on key pages of the site can help gain useful information from your visitors.

Any time you gather market data (i.e., conduct market research) without understanding the objective and expected use of results, you run a serious risk of either (a) answering the wrong question, or (b) providing the wrong answer to the right question. Better to follow Jay's advice and get clarification before you embark on this assigned task.

Just as a simple example, is the issue list price or net effective invoiced price?

Not sure how you are going to know the profit of competitors unless they are publicly listed and have to disclose that information. Even then, it will be aggregated so it is disguised.

Sounds to me like its a commodity business which is why it's a price story.

Anyway, I have a whole section on my blog about pricing products if you're interested or its useful.

First thing is to simply collect the price information where you have it available - sometimes the data has its own logic. It's unlikely that you'll find costs, margin or profit data - this is usually commercially confidential. However, your internal purchasing team should be able to give a rough estimate of costs and so help you estimate profitability. Sales teams will likely have a view on competitor margins.

With the pricing you'll need not just to collect all information, but to also to classify products to make fair comparisons. You'll want to build a database, and to ensure the database can be updated over time so you can track trends - so referencing model numbers and model number changes for instance.

You can do two immediate bits of analysis - the first is a 'where are we in the market?' analysis which is simply to look at where your pricing ranks in comparison to competition. The second is more sophisticated and is an analysis of price against features to estimate market value of features. Again then you can do a 'where are we' type analysis. Share it with the sales team to discover the stories behind any anomalies.

One important thing to realize is that though price will be important to customers, it is rarely the most important factor (unless the price difference is really large). Customers get value from factors like product quality, quality of delivery, reliability, flexibility for instance that can outweight small price differences. So ensure your win-loss analysis doesn't just get fixated on price as the easy answer.