How does the price level of a competitor's product influence our pricing strategy?

Kotler's matrix defines a competitor's pricing strategy by placing each product on the matrix based on their perceived product quality and price level. It also takes into account the estimated annual units sold. The position of the product on the matrix indicates the competitor's pricing strategy.

A perceptual map is a visual representation that helps in evaluating a competitor's market share. In the context of competition-based pricing, each product is placed on the perceptual map, where the size of the bubble indicates each competitor's market share. This allows for a quick visual comparison of the market share among competitors.

The annual units sold by a competitor can influence our pricing strategy by providing insights into the competitor's market share. A larger market share, indicated by a larger number of units sold, may suggest that the competitor's pricing strategy is effective. This information can be used to adjust our own pricing strategy, either by matching the competitor's price to compete for market share, or by differentiating our product and setting a higher price. It's important to consider other factors as well, such as product quality and perceived value.