Why Would You Want Competitors to Know Your Prices?
The fact is, a lot of companies go to great lengths to communicate their pricing strategy, and each pricing move, to their competitors – and for good reason.
While many industries have no price leadership, many others do. What is price leadership? It’s where one participant in an industry makes the first move on adjusting prices, and the other industry participants follow relatively quickly.
Of course we all know discussion of pricing between competitors is forbidden. However, there is nothing forbidden about announcing price changes in a public forum such as web posts, trade magazines, newspapers, social media, etc… Smart competitors will likely be looking for these pricing strategy communications in order to respond accordingly.
Industries that exhibit this level of price consistency are typically more profitable than those that are more fragmented and lack cooperation.
Have you been considered a price leader in your industry? Was there a time your pricing strategy change appeared to “catch-on” with competitors? Or if you’re in an industry with a clear price leader, do you follow in a timely manner?