Which pricing strategy is based on competitors' pricing, market offerings, and costs?

Competition-based pricing is a strategy that relies on the prices set by competitors, as well as the overall competitive landscape and market offerings. This approach helps businesses position their products effectively in relation to similar items offered by competitors. By analyzing how competitors price their products, a company can determine an appropriate price point that attracts customers while still ensuring profitability. This strategy is particularly useful in highly competitive markets where many similar products exist, allowing companies to respond to changes in competitors' pricing structures and maintain their market share.

In contrast, value-based pricing focuses on the perceived value of a product to the customer rather than competitors' prices, which may not reflect the actual market conditions. Cost-based pricing involves setting prices based on the cost to produce the product plus a markup, without considering competitor pricing or market demand. Dynamic pricing involves adjusting prices based on real-time supply and demand trends, which is more reactive than strategically based on competitor analysis.