What does "competitive pricing" mean?

Competitive pricing refers to the strategy of setting the price of a product or service based on the prices charged by competitors in the same market. This approach helps businesses to remain relevant in their pricing strategy and attract customers by ensuring their prices are aligned with what consumers expect based on market standards. By analyzing competitors' prices, a business can decide to set its own prices at, below, or above the market average, depending on their overall strategy and target market.

This strategy is beneficial as it encourages healthy competition, allows for better positioning in a competitive market, and helps customers perceive a brand as fair and equitable in its pricing. It does not necessarily mean always having the lowest price, but rather being in tune with the pricing landscape to optimize sales and profit margins while meeting customer expectations.