Competitive pricing is a strategy where a business sets the price of its products or services based on what competitors are charging. Rather than focusing solely on costs or perceived value, the aim is to position the offering attractively within the market by matching, undercutting, or slightly exceeding rivals’ prices.
This approach is common in markets where products are similar and price is a key factor in consumer decision-making, such as retail, travel, or consumer electronics. Competitive pricing can help a business stay relevant, attract price-sensitive customers, and maintain market share.
However, it requires constant monitoring of the market and can impact profit margins if not managed carefully.