Competitive Parity
Competitive parity is a strategy in marketing where a company sets its prices, advertising, and promotions at a similar level to its competitors. This approach helps prevent price wars and maintain a stable market share.
For example, if a company in the smartphone industry notices that its competitors are offering discounts and promotions, it may also decide to offer similar deals to remain competitive. By doing so, the company ensures that it does not fall behind its rivals and maintains its market position.
However, it is important for companies to also differentiate themselves from their competitors in other ways, such as product quality, customer service, or unique features. While competitive parity can help prevent price-based competition, it is not the only factor that determines a company’s success in the market.
Examples of Competitive Parity:
- Company A and Company B both offer similar products in the same industry and have similar pricing strategies.
- Company C notices that its competitor is running a promotion and decides to offer a similar deal to attract customers.
In conclusion, competitive parity is a balancing act that companies must carefully consider in their marketing strategies to stay competitive in the market.
Learn more about Competitive Parity on Wikipedia.