Question

Topic: Website Critique

Pricing Variations Based On Competition

Posted by Anonymous on 1/7/2005 at 4:29 PM ET 250 Points
I am looking to do an analysis to create a new stragety for pricing based on competitive pressures within a given market. For example, I have 40 stores in a single market (an example, Dallas, TX). I have stores that are in direct competition geographically with competitors, and other stores that do not compete directly with a competitor. If there is no direct competitor in a stores trade area, I could develop a strategy to increase my margins in these stores by raising price points.
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  • Posted by SRyan ;] on 1/8/2005 at 5:02 AM Member
    A quick suggestion (my pillow is calling):

    Instead of setting a variety of prices, perhaps you could institute a broad policy of beating a competitor's price by 10%. Try it for a while and see how many customers take advantage of it!
  • Posted by telemoxie on 2/5/2005 at 11:58 AM Accepted
    Be careful, you don't want to invite competion by artificially raising prices in one area. And be sure to calculate the cost of creating and implementing these "price zones" versus the possible extra income - will this require substantial programming and integration work? You might find that programs to attract profitable customers in your busier areas has a higher ROI.
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