Organizations using competitor-oriented approaches to set prices might typically use the following two pricing strategies:
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Customary Pricing: This strategy sets prices based on what is typical or expected within the industry. Companies may align their prices with those of competitors to meet consumer expectations.
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Loss-Leader Pricing: This strategy involves setting a product's price very low (often at or below cost) to attract customers to buy additional goods, thereby increasing overall sales despite the loss on the initial product. This is often used in competitive markets to draw in customers away from competitors.
Target profit pricing and prestige pricing are generally more focused on driving specific profit margins or creating a high-end image rather than directly reacting to competitor prices.