Question

What are some of the difference between demand influences and supply influences on our pricing decisions?

What affect does competition have on our pricing strategy? What types of resources could we use to help us analyze the competition in the market place?

Answer 1

Supply influence on our pricing decisions:

We know that when supply exceeds demand, price falls. The manufacturer of a product sets its price at a lower level than the previous level. There is an inverse relationship between the supply and price, demand being unchanged. Increase in supply of goods and services while demand remains unchanged results in decrease in prices to a low equilibrium price. Whereas a decrease in supply, demand being same leads to a rise in prices to a higher equilibrium price.

Demand Influences :

Increase in demand for goods and services,supply remains same, results in a higher equilibrium price. Similarly, when there is a decrease in demand, supply being the same, lower demand leads to a lower equilibrium price.

So depending on the supply and demand situations we set our price.

What affect does competition have on our pricing strategy? What types of resources could we use to help us analyze the competition in the market place?

The most critical question that arises in our mind is what impact does competition have on our pricing strategy? In other words, how the competitors price affect our pricing strategy. Competition among the sellers means whose price is the best price. The customers will choose that seller whose price is the lowest price. High competition results in a lower market price for a product. This competition will persist in the market as long as there is demand for things.

Resources used to analyze the competition in the market place :

1) Find Out Your Top Five Competitors: Every company needs to be at the top rank. So for this you have to follow the best strategies, you have to identify your competitors and compare their strategies with your's. For this you can take the help of Google, It is a great resource to find out your competitors and their business strategy.

2) Search for the Competitors Content and analyze it thoroughly: Try to find out the competitors content, what they are posting in their sites and other social medias. Analyze the type of contents which makes them more popular among the customers. There are different types of contents like blog posts, case studies, ebooks, videos, podcasts, press releases and so on, which one is your competitors' choice, that needs to find out.

After that you must check the frequency of their updation, how frequently they are updating their content. If their frequency is higher, then you must start to update your content more frequently so that it will add more traffic to your site. The most important thing is the content must be relevant and interesting, so that it can engage more people in reading your content.

3) Compare the Keywords : Sometimes your contents are same as those of your competitors', also you are updating timely manner, then what's the issue that your competitors are in the highest rank ?
It may be using of keywords, or their SEO structure. What keywords they are using or how they are using these keywords is most important to see.

4) Analyze the Social Media Profile: In today's date if a company doesn't have a social media profile, then it is likely to get less popularity as compared to its competitor. Social media is the most powerful tool which connects people throughout the globe. Integration of social media sites to your site, allows you to share your content and success stories. It is necessary to find out how effectively your competitors are using their social media profile to generate huge traffic.

Gathering all the information regarding your competitor's business strategy, you try to find out your lacuna and improve it immediately.