Finance:Competitor indexing
Competitor indexing is a price setting technique used by marketers, in which a firm pegs the prices of its products to those of a competitor. This may involve matching competitors' prices, or setting prices at a fixed amount or percentage above or below. This strategy may be used by fringe firms in industries with one or two dominant companies, or in price-sensitive industries such as food retail,[1][2][3] and is sometimes referred to as the "follow the leader" strategy.[4]
One advantage of competitor indexing is convenience, as extensive marketing research and statistical analysis are not required. The main disadvantage is that it is purely reactive. Price cannot be used as a variable when constructing a marketing mix: it becomes a constant over which the firm has no control.
See also
References
- MAHESHWARI, YOGESH (2012-09-27). MANAGERIAL ECONOMICS. PHI Learning Pvt. Ltd.. ISBN 978-81-203-4667-3. https://www.google.ca/books/edition/MANAGERIAL_ECONOMICS/KUITUCiA1EoC?hl=en&gbpv=1&dq=%2522Competitor+indexing%2522&pg=PA200&printsec=frontcover. Retrieved 2025-07-01.
- ↑ "Britain’s Sainsbury’s extends Aldi price match scheme to convenience stores". https://www.reuters.com/business/retail-consumer/britains-sainsburys-extends-aldi-price-match-scheme-convenience-stores-2024-11-04/.
- ↑ "Tesco Aldi price match". https://www.tescoplc.com/tesco-aldi-price-match.
- ↑ Butler, Sarah (2025-01-28). "Asda ditches Aldi and Lidl price-match scheme just a year after launch" (in en-GB). The Guardian. ISSN 0261-3077. https://www.theguardian.com/business/2025/jan/28/asda-ditches-aldi-lidl-price-match-scheme.
- ↑ "Follow-the-Leader Pricing: What it Means, How it Works" (in en). Investopedia. https://www.investopedia.com/terms/f/follow-the-leader-pricing.asp.
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