What is Price Monitoring

In a turbulent market, it becomes especially important to be able to react quickly to constant change and be flexible in your pricing strategy.

This applies to all industries: e-commerce, retail, trading and distribution companies, and manufacturing. Competitive price analysis gives you the ability to effectively manage sales, maximize profits and increase customer loyalty.

Let's delve into the importance and advantages of competitor price monitoring in this article.

What's That

Price monitoring of competitors is regular tracking, collection and study of information about competitors' prices for goods of interest to the company, assessment of the dynamics of price changes and pricing strategies of other market players. Solving this problem allows us to understand how demand varies with price and to offer the buyer the equilibrium price that will be most attractive and most profitable for the seller.

That is, monitoring keeps the company's prices competitive, attracting more and more customers and increasing profits.

Application

Analyzing competitors' prices allows you to understand the appropriate price at which to sell a particular product, determine when to adjust the cost of goods, examine how it will impact sales, decide when to make bulk purchases, and determine when to remove items from the assortment entirely.

Thus, price monitoring:

• provides up-to-date information about competitors' pricing, so it allows you to quickly respond to changes in demand and offer more attractive prices to customers, increasing their loyalty;
  
• helps to increase sales and manage them flexibly by maintaining optimal inventory levels, more accurately forecasting demand and building an effective pricing strategy for each product category;
  
• helps to reduce costs, saving time and human resources, as well as changing the work with suppliers on more favorable terms - the ability to purchase goods at more favorable prices.
  

How it Works

It’s important not only to collect but also to interpret competitor pricing data. A large assortment matrix requires an automated approach to collecting such data.

There are two main parts to the process:

1. Parsing
   
2. Comparison with the company's own product matrix
   

Parsing is the collection and analysis of publicly available information in automatic mode with the help of specialized programs or services. The parser program collects information about regular price offers, promotions and assortment of competitors in open sources: official websites, online store websites, aggregators, marketplaces, price lists and catalogs. And that's just the preparatory stage. The goal is to not only get a list of the competitor's items and prices, but to compare them to your own product matrix.

This is where the main work begins - matching the product to the company's own product matrix, or product matching. Identical goods from different competing companies may have completely different names. Both abbreviations and sets of descriptive characteristics can be differentiated. Finding the product needed for analysis purposes in the amount of data obtained from parsing is comparable to finding a needle in a haystack. Therefore, this is handled by special software - a combination of complex heuristic algorithms and neural network model of data processing.

The system selects for each product from the company's directory a similar product of a competitor, whatever name it has, and shows the difference between the price offers. This information serves for subsequent strategic decisions.

There are specialized services for such complex research.

Benefits of Monitoring and Analyzing Competitors' Prices

Continuous monitoring of competitor prices not only allows you to develop a flexible and effective pricing strategy, but also:

• Maximize sales by forming long and short term sales plans;
  
• Competently position yourself in your niche and identify new markets for business development;
  
• Prepare effective strategies for promoting goods and services;
  
• Build a unified strategy in terms of regular prices and promotional activities.
  

In sum, it all helps to strengthen the company's position.