4.   PRICING BASED ON COMPETITORS

Companies who use this method of pricing base their prices on what their competitors charge; with little attention paid to their own costs. Once competitor prices have been determined, a company using this pricing method may "tag" a lower price, an equal price or a higher price to their own products; depending on their positioning strategy and marketing objectives.

Pricing based on what competition charge is an extremely common method of pricing. This approach, however, does NOT consider the supply and demand of products and services. Instead, it focuses primarily on the industry standard of pricing.