Price Monitoring – Stay Ahead of the Game

Data is invaluable these days. If you, as a brand manufacturer, are not utilizing data, then you are missing out on a gold mine. Data can be used in many different areas to inform a company. One of the most important things to track or monitor are prices. If you are not monitoring your prices, then who it? The answer is, other companies, so that they can compete against you strategically.

Let us discuss what exactly price monitoring is, and relevant information to how it can benefit a brand manufacturer like yourself!

What is this Price Monitoring all about?

Price Monitoring is about tracking prices within the marketplace, your own prices or those of the competition. This process of watching and analyzing market prices is usually done through an external smart software or tool, or even online via website manually. Though additional features may vary depending on the method or system used for price monitoring, the core functionality of it should be the same: to assess the prices in the market.

How do price monitoring tools work?

Using an external automated tool for price monitoring is highly advised, as it can automatically collect product information from competitors and compare it to your product data.

To be able to do this, you must choose the scope of data that you wish to analyze. This can mean comparing one of your products to similar ones on the marketplace, or only the top competitors, or a certain wider range of your products and competitors’ products. The data is there to be mined, t is up to you to decide which data you want to collect and analyses that will benefit the pricing decisions you wish to make.

When the scope has been established, the software can then collect the data and process it to provide meaningful information. This information is usually taken from competitors’ websites or selling places and is then compared to your products. Artificial intelligence is usually the key player here, drawing comparisons and conclusions from algorithms using product codes, descriptions, titles, brands and more.

Key things to look for in price monitoring tools

• Where does this data come from? Is it reputable? Accurate?
• Is the data current? Real time? Constantly updating and noting long term and short-term trends?
• Is the software easy to integrate into your current systems, so that information can be easily transferred, used and applied in various areas of the company?
• What kind of data was collected? Is it just prices you’re looking for? Are you interested in other information such as other costings (fixed and variable)?
• Does the information given include market reports and competitor analysis?
• How do you want the data presented? Are proper data visualizations utilized to present data in a meaningful way to extract effective information?
• How user friendly and accessible is the system? Can information be shared easily? Reports captured and saved easily? Retrieved easily?
• Does the solution provide specific KPIs for your sales channel on a dealer level e.g. price initiator shares or price follower share? This is to identify pricing strategies of your customers.
• What other additional automated features does the system offer?

How can price monitoring help manufacturers?

As brand manufacturers, and even distributors and suppliers, it should be well known and considered that the price of your product is of key importance and value to customers. It provides you with a competitive edge, if done well, no matter what your pricing strategy is. A pricing strategy is great when taking all relevant factors into consideration. While analyzing a company’s internal factors like the brand image, the perception of quality, the cost prices, desired margins etc. are of course very crucial to price setting, the external environment is also very important. Even high-end luxury brands need to consider current market trends and the prices of the competitors. It is as they say, ‘knowledge is power’ and it is crucial to observe and note the changes in the market, rising and falling trends as well as evolving factors.

Here are some reasons why price monitoring is important and beneficial for you:

1. Keeping track of channel partners – as a brand manufacturer, probably with a wide distributor network, it is important to stay knowledgeable about their prices and sales. This is to ensure than your brand and products are being sold in a way that is in accordance with your goals, and even agreements with these partners.
2. Unveil competitors’ tactics and strategies – with Artificial Intelligence analyzing changes and trends in the market, it may be easier for you to understand their tactics and price drivers, because you have complete access to all the relevant prices of the relevant distributors/retailers.
3. Extended analysis – over time, with analysis over many monitoring cycles, one can deduce customer behavior long term, in a comprehensive manner.
4. Stay Notified – with some systems having automated alert notifications, you can easily stay abreast of any set price changes, e.g. if a price drops below a certain value or increases above a certain value.
5. Data Integration – systems can compile sales data as well as advertising data to generate a comprehensive analysis of the price situation, which can paint a clearer picture of pricing reasonings and effects.
6. Data Visualization – a proper watch tool will present this pricing and market information in a cohesive way, easy to find, access and understand. Numerous spreadsheets in various places can cause managers to lose track of information, but one centralized place, that provides the data in a summarized, meaningful way will make analysis a lot easier.
7. Easy Access – automated tools can also provide easy storage and transfer of data, by allowing printouts or data storage elsewhere easily, if needed.
8. Strengthen your competitiveness – with access to all this data, easily understandable as mentioned above, you now have the power to be optimally competitive. Utilize the data to make changes that will strategically boost your brand.

Let’s now discuss how to practically use this for the purpose of strengthening your competitiveness.

How to use this data practically?

Information is wealth, and some ways to use this wealth of information collected as mentioned above are:

• Stay abreast of new trends in the market, new products, seasonal variations etc.
• Notice any lacking areas within your own product lines.
• Observe the competition to set a competitive launch price for new products.
• Continue to reference competitor’s prices to remain competitive.
• Increase margins on products with no/less competition.
• Observe market trends to know when to modify your prices, whether to increase or decrease your price.
• Exclude products from the price comparisons that don’t make sense to include.

Perception and comparison

It is still important to note when deriving a price strategy what the perceptions of a brand are. Consumer perceptions can change swiftly and play a large, influential role in what products are popularly consumed. Social media today makes the chain feedback barrier between manufacturers and final customers invisible. End consumers give their critiques of a brand and its products online easily and so trends can be influenced very easily. As such, it is very crucial that brand manufacturers stay abreast of feedback, as well as marketplace trends because brands are always being compared. As a result, it is extremely important to respond to any criticisms as quickly as possible, to clarify any doubts or correct any mistakes with any products. At the end of the day, the better the perception of the brand in the channel partner’s or consumer’s eyes, the higher a price that can be charged of the good. The brand itself and the value it holds plays an important role as well. In the same breath, because of consumer’s changing attitudes, it is doubly important to stay informed so that any changes in market prices can be immediately noticed. If a competitor’s brand value decreases, alerts with immediate updates can help you strategize quicker for any possible pricing opportunities. In conclusion, a price monitoring system is invaluable to a brand manufacturer. Technology has grown and Artificial Intelligence is capable of gathering data and analyzing trends which is so useful today. Especially since price monitoring software’s are tracking new data and any changes continuously and real-time, companies have the opportunity to strengthen their pricing strategies.

Some information that could be collected range from:

• pricing information like pricing overviews, direct price alerts and offer links.
• historical information like price developments and trends, lowest price ever and highest price ever.
• dealer information like the initiator and their pricing.

Price monitoring is crucial to business success for any and every manufacturer. Especially when consumers have a plethora of choices and options in the marketplace, your brand needs to stand out. A business cannot always invest in something new to generate more profit. Sometimes the key lies in making current products and strategies more efficient, and pricing is one very important aspect. Constant price monitoring, analysis and reevaluation with the correct software tools can transform sales and revenues for your brand.

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