A practical method for CFOs, commercial leaders, and small pricing teams at $100M to $2B consumer and B2B companies. Compare prices on the same basis, build a competitive price index, and decide which gaps need attention before finalizing the 2027 plan.
Before you respond to a competitor’s price cut, check what changed. A lower shelf price may reflect a smaller pack size, a temporary promotion, a temporary price reduction, or different terms. Those differences matter because each one calls for a different decision.
Many industries, particularly industrial distributors and manufacturers, still price on a cost-plus basis. Top performers also pay close attention to competitive prices, but a competitive pricing analysis only works when it is like-for-like: truly comparable products in your portfolio against the competition, with the gap measured on those products. What we tend to see instead is an aggregate view of competitor prices. Those averages hide a lot, including mixed pack sizes and a blend of promotional and regular prices.
The five steps below cover choosing competitors, matching products, collecting prices, building an index, and evaluating a response. A one-person pricing team can start in Excel. Our hypothetical client examples also show where limited data or inconsistent comparisons can lead the team to the wrong conclusion.
Competitive pricing analysis defined. It is the regular comparison of your net or shelf prices with a defined set of competing products, using the same unit and comparable terms. A competitive pricing analysis shows your position relative to a target. Margin and elasticity help you assess whether changing that position would improve the business.
Figure 1. The five steps of a competitive pricing analysis, from choosing comparable products to evaluating a price response.
Table of Contents
Why Competitive Pricing Analysis Matters for the 2027 Plan
Most companies at this size already have some information about competitor prices. Where it comes from depends on the business:
• Consumer products. Syndicated data from the two largest providers, Circana and Nielsen.
• Strong e-commerce presence. Where you and your competitors sell heavily online, you can scrape prices systematically.
• Prices that aren’t transparent. Rep observations, screenshots, and quotes shared during a negotiation.
Those last sources are useful leads, but they may be missing the pack size, date, or terms. Gather those details before using the price to make a decision.
An unnecessary price cut reduces profit and can be difficult to reverse. Our Revenue Growth Analytics Maturity Report research across about 2,000 public companies estimated a median operating-profit lift of about 6.4% from a 1% improvement in net price realization (about 9% in Industrials and Consumer Staples). The effect of a specific price move also depends on volume and costs. Holding price has consequences too, particularly when the plan assumes stable share while customers are moving to alternatives.
Store brands make this comparison particularly relevant for consumer businesses. Private label is gaining share in many industries, particularly food and beverage, where retailers are rolling out their own products to compete with branded ones. According to PLMA’s midyear report on Circana data, store brands reached a 23.8% unit share in the first half of 2026. Their units rose 0.2% while national-brand units fell 0.5%.
In our experience, a branded product can ideally hold about a 15 to 20% premium over private label. In some cases, though, private label is 30 to 40% cheaper, and a gap that wide gives consumers a real reason to switch. If you are a branded company, watch your price gap to private label competitors closely.
Signs You Have a Competitive Pricing Analysis Problem
If you don’t have a database or data warehouse that systematically collects like-for-like competitor prices over time, by week, by day, or through monthly surveys, you have a competitor pricing analysis problem.
The source can vary. You might scrape prices, gather quotes and other offline observations, or buy syndicated data. What matters is that the prices land in one place where you can query and analyze them. A bunch of anecdotes and random emails is not a system.
In one hypothetical client example, a product manager at a PE-backed distributor checked high-volume items while making price changes. The work was careful, but coverage depended on how much that person could review.
Competitive Pricing Analysis Step 1: Choose the Competitors Your Buyers Consider
Start your competitive pricing analysis by asking what a shopper or purchasing manager would buy if your product were unavailable. The answer gives you a more useful competitive set than a list of every company in the industry. In a hypothetical pharma example, the initial list contained about 30 competitors; the more useful question was which two mattered to the pricing decision. Pick three to four competitors you care about for each of your brands, not for each product group, provided they reflect the buyer’s actual choices.
The set changes as you move across your brands:
• Premium brands usually face one or two direct brands.
• Mainstream brands face those brands plus the store brand.
• Value brands often face the store brand first.
Include the store brand in your competitive pricing analysis wherever buyers see it as a real alternative. The effect of a price change may differ in each direction: a meta-analysis of grocery categories found that national brands affected store brands more than the reverse when measured in cross-price elasticities. That asymmetry did not hold when measured as absolute effects, so it should not be treated as a general rule about competitive strength. For B2B sellers, ask Sales which competitors appear on lost quotes, then check those names against your win-loss records.
Competitive Pricing Analysis Step 2: Match Products on the Same Basis
Product matching often takes much of the work in the first competitive pricing analysis. Someone needs to map your products to competing products and agree which differences matter. Once those rules are clear, the team can reuse the map and update it as products change.
Then build a competitive equivalence matrix, with each of your products on one row beside its true competitor match, so you compare the same products apples to apples. If few competing products share your size and parameters, it is fine to use slightly different products as long as you use an equivalized price: price per equivalent case or price per equivalent volume.
Figure 2. Illustrative example, not client data. A competitive equivalence matrix matches each product to its true alternatives and converts any size difference to a price per equivalent case.
Normalize price to a unit that makes the products comparable: per ounce, per can, per load, per daily dose, or per terabyte. You can’t assume the shelf label has done this consistently. NIST’s Unit Pricing Guide notes that there is no federal mandate in the US, so unit pricing is voluntary unless required by state law or regulation. Calculate and check the comparison yourself.
For Q1 2026, PLMA’s analysis of Circana data reported an average store-brand price of $4.11 per unit, compared with $4.79 for national brands, across all grocery items, food and nonfood. That is about a 17% national-brand premium over store brands, but it is an all-category average, so mix is at play: the two sides sell different baskets of products, and the gap can move even if no shelf price does. In a separate US food and beverage comparison using price per volume, a Circana insights director put the gap at 28%, with store brands below national brands. The denominators, product scopes, and units differ, so those percentages are not directly comparable. Choose your basis, document it, and use it consistently.
Illustrative example, not client data. Your 12-pack sells at $6.49. A rival’s 24-pack sells at $11.99. On the sticker, you look 46% cheaper. Per can, you are at 54.1 cents and the rival at 50.0 cents, so you are 8% more expensive. A team that compares stickers will think it has room to raise price when it may already sit at a premium.
Figure 3. Illustrative example, not client data. The same two products read as 46% cheaper on the sticker and 8% more expensive per can.
Separate Exact Matches from Broader Category Groups
In one hypothetical client example, a tech hardware maker used two levels of product matching. Exact matches, including the same capacity, supported direct price comparisons and near-term decisions. Broader category groups supported the elasticity analysis, where buyers may also consider a similar model at a lower price or interpret a price difference as a quality signal. This kept less comparable products out of the direct price index while retaining enough history for the demand model.
In another hypothetical example, a beverage brand applied the same discipline to pack size. Its team used one size-match rule across all its commercial analysis, so a 12-pack was never set against a 24-pack in one report and treated differently in the next.
Include the Terms That Affect What Buyers Pay
In B2B, a competitor’s website price may exclude costs that matter to the buyer. In the hypothetical distributor example, the team was planning a price scrape when it noticed that the company offered free freight and some competitors did not. A fair comparison needed to account for that difference, along with minimum orders, payment terms, rebates, and service levels. Compare landed cost where you can and flag the comparisons where information is missing.
At the shelf, compare prices at the same level. Your list price and a competitor’s shelf price include different margins and cannot be compared directly. In B2B, invoice price may also leave out rebates and freight you absorb. Use your price waterfall to understand your pocket price, then make sure the competitor benchmark reflects comparable costs and terms.
The same issue arises in a pharma competitive pricing analysis. In one hypothetical client example, a global pharma team compared prices per daily dose because pack sizes and strengths varied too much across countries for pack prices alone to provide a useful comparison.
Competitive Pricing Analysis Step 3: Collect Prices You Can Verify
Choose competitive pricing analysis sources that fit the decision and your budget, and record what each one does and does not cover:
• Syndicated scan data (consumer goods). Useful for shelf prices, promotions, and volume by retailer. It also shows what distribution and merchandising support you get versus competitor products, so you can see the distribution gap as well as the price gap and judge whether you are getting a fair share of merchandising. It has a cost, and coverage may exclude some retailers and channels.
• Retailer websites and marketplaces. A relatively quick way to begin collecting price history. They show advertised prices rather than completed sales, and availability can affect the comparison.
• Scraped competitor sites (B2B). Useful for catalog prices, though the coverage is often patchy. Check the site’s terms first.
• Quote checks and win-loss records (B2B). Comparable quotes can fill gaps for standard items. Technical products require more checking because the specifications need to match.
• Customer and sales input. Log the date, source, and pack or specification. Verify the information before treating it as a confirmed price observation.
Clean the data before using it in a competitive pricing analysis. Remove obvious scanning errors and separate clearance prices on discontinued items from regular prices, so a temporary sell-off does not look like a change in the competitor’s ongoing position.
Keep the competitive pricing analysis at the level where you make the decision. The hypothetical beverage brand reviewed prices by retailer, product group, and time window. It avoided rolling the comparison up to channel because an average across retailers could hide the price gap an individual buyer saw.
Collect competitive pricing analysis data lawfully and make pricing decisions independently. The FTC’s price-fixing guidance distinguishes independent responses to market conditions from agreements or coordination among competitors. Do not exchange nonpublic pricing information with rivals to run a competitive pricing analysis. Involve counsel when you have questions about scraping, confidential customer information, or data sharing.
Track Regular, Promotional and Weighted Average Prices
A competitor’s regular price can be misleading if the product is frequently on promotion. For each product at each retailer, collect three prices and the timing of promotions:
• Regular or everyday price. What the product sells for outside a promotion.
• Promotional price. What it sells for on deal.
• Weekly weighted average price. What the consumer actually paid over the week. It reflects both prices, so it sits between them and moves toward the promotional price as more volume sells on deal.
Figure 4. Illustrative example, not client data. The regular price never moves, yet the weighted average price falls in every promoted week. Comparing only one of these lines can give the wrong gap.
Illustrative example, not client data. Your regular price is 5% above a rival’s, giving you a regular-price index of 105. You promote for 8 weeks a year at 15% off, while the rival promotes for 26 weeks at 20% off. A simple average across 52 weeks puts your price about 2.3% below your regular price, and the rival’s about 10% below its regular price. On that basis, your index is about 114. This is a time-weighted comparison. Use sales volumes to calculate the weighted average price once those data are available, because promotional weeks can account for more units.
In one hypothetical client example, a sales leader also wanted to see when competitors promoted. That calendar could help the team avoid committing promotion dollars to the same weeks a rival was investing heavily. Our Promotion Scorecard shows how to assess the return on each event before deciding which weeks deserve funding.
Work Within the Limits of Your Data
Start collecting history for your competitive pricing analysis even if the first dataset is incomplete. The hypothetical hardware maker had no competitive price history when the work began, which limited the elasticity, promotion, and scenario work. The first round of modeling covered one online marketplace where prices were available for both sides. The plan was to revisit the other markets after collecting about a year of history.
Sparse data also affects the level at which you can model demand. In the hypothetical distributor example, sales were too thin for SKU-level sensitivity analysis, so the model used logical category and brand groups. For that work, we would ideally want about 104 weeks of history; around 40 weeks can sometimes support an initial model, depending on the data. The competitive pricing analysis itself can begin with a short list of high-volume items while history builds. Make the coverage and limitations visible in the competitive pricing analysis report.
Competitive Pricing Analysis Step 4: Build the Index and Agree on a Target
In a competitive pricing analysis, the competitive price index expresses your price relative to a weighted competitor benchmark.
Formula. Competitive price index = your price per unit / competitors’ weighted average price per unit x 100
An index of 100 means parity; 115 means your price is 15% above the weighted competitor price. Whole numbers are usually sufficient for a competitive pricing analysis review, while the underlying calculations should retain their precision. Use the full name in reports and simulators. In one hypothetical client example, a pharma team confused the abbreviation CPI with the consumer price index.
Worked example, illustrative, not client data.
1. Your product is 54.1 cents per can.
2. Rival A is 50.0 cents with 60% of competitor volume. Rival B is 46.0 cents with 25%. The store brand is 38.0 cents with 15%.
3. The weighted competitor price is (50.0 x 0.60) + (46.0 x 0.25) + (38.0 x 0.15) = 47.2 cents.
4. The index is 54.1 / 47.2 x 100 = approximately 115.
Build the index at the detailed level. For a manufacturer, that means each retailer and product against your competitors. As you roll those results up, weight them by volume. Weight the competitor benchmark by comparable unit volume so that a small rival does not carry the same weight as the market leader. Keep the lowest comparable price beside the index too. The weighted average can look reasonable while one relevant alternative is substantially cheaper.
Agree on the Target Before Judging the Gap
In one hypothetical client example, a footwear brand’s executive committee valued the index because it made the company’s position against competitors easy to see. But one executive questioned why the dashboard labeled a brand premium as a risk when that premium was part of the gross-margin strategy. The index needed to be judged against the intended position.
We recommended agreeing on a target by product group and subcategory before labeling a gap as a risk or an opportunity. A target range gives the team room to manage normal variation: for example, 110 to 120 for a premium line and 100 to 105 for an entry line. Sales and Finance should agree on those ranges using the brand’s strength, elasticity and commercial strategy.
Figure 5. Illustrative example, not client data. Compare each product group’s index with its own target range. The premium line has the highest index and remains within its intended range.
Competitive Pricing Analysis Step 5: Evaluate the Gap Before Changing Price
Read the gap over time. Has it expanded, or has it held steady? What is the competitive price index for each brand? Are you at parity, 5% more expensive, or 10% cheaper? Then ask where the brand needs to play. If you are positioned as a premium player, being 5% more expensive may be fine, while being 10% cheaper, given the differentiation in your products, is too aggressive, and you need to course-correct.
In a competitive pricing analysis, an index outside the target range is a reason to investigate. Work through these checks before approving a price change:
1. Is the comparison valid? Confirm the product match, unit, date, and terms. A difference in any of these can explain an apparent gap.
2. Will the gap persist? Distinguish a short promotion from a change in regular price.
3. Is it affecting the business? Check share, sales velocity, and distribution for the same retailer and product group. Stable results may support holding price while you monitor the gap.
4. What caused the gap? If it widened at the shelf, check whether the retailer increased its margin before you fund a response. Our guide to retailer pricing covers that conversation.
5. Would a response improve profit? Estimate the dollar impact using your margin and price elasticity.
Illustrative example, not client data. An entry line sells $20M a year at a 30% gross margin, generating $6.0M in gross profit. Its index is 112 against a target range of 100 to 105. A 7% price cut would bring the index to about 104. To preserve gross profit, volume would need to rise by 7 / (30 – 7), or about 30%.
Using a simple elasticity approximation of -1.8 gives a modeled volume increase of about 12.6%. Gross profit would fall to about $5.2M, roughly $820K less per year, before any competitor response. On these assumptions, the price cut does not pay for itself. The calculation holds unit costs constant and excludes volume transferred from your other lines.
Depending on the cause, a different pack, a more targeted promotion or a clearer explanation of the product’s value may address the buyer’s concern at lower cost. Our Price Wars guide works through break-even volume and the fight, flank, or fold decision. How to Use Competitive Pricing covers the broader strategy.
Figure 6. Checks to complete before responding to a price gap, with an owner and a review date for any approved change.
Use a Scorecard to Explain the Recommendation
In one hypothetical client example, a global pharma team scored each brand and country against five yes-or-no criteria covering elasticity, the competitive index gap, inflation, share trend, and competitive position. Together, those assessments indicated a strong, moderate, or weak case for a price move. Several recommendations were to hold price. One brand scored well on four of the five criteria, and the recommendation was still to hold, because the one it missed was elasticity. The scorecard gave the team a way to explain those decisions as clearly as a recommendation to change price.
Figure 7. Hypothetical client example; the individual yes or no marks are illustrative. A high score does not settle the decision when the miss is elasticity.
Make Competitive Pricing Analysis Manageable for a Small Team
Assign an owner and a regular review slot so the competitive pricing analysis stays current. A small team can start a competitive pricing analysis with the following responsibilities:
• One owner. Usually the pricing lead or a commercial finance analyst. Sales supplies leads, and the owner verifies them.
• A set refresh. Review monthly in most categories and weekly during a price move or an active promotional season. Update the product map when packs, specifications, or competitors change. A new barcode can otherwise break the comparison and conceal a price increase.
• Written triggers. Agree in advance what starts a review, for example, an index more than five points outside its corridor for two straight periods, plus a share drop.
• A response rule. Agree who can approve a change and how quickly the team needs a decision.
• A decision record. Log the decision and its rationale, then review whether holding or changing price produced the expected result.
Start with around 20 of your highest-priority products and expand as the competitive pricing analysis becomes useful. A shared workbook and a consistent product map may be enough initially. In one hypothetical client example, a creamer brand used a competitor view by category showing distribution, the price index, and the price range, with an alert to flag items for review. Decide what further competitive pricing analysis tooling you need once the map works and the team knows which information it uses.
Common Competitive Pricing Analysis Mistakes
• Matching the leader automatically. A competitor’s price reflects costs and a strategy that may differ from yours.
• Treating the average as the answer. A national average hides the retailer where the gap is hurting you.
• Ignoring the store brand. Include it when buyers consider it a real alternative, even if you don’t see it as a direct peer.
• Reading price without considering value. Quality, service, or brand strength may support a premium. The index alone does not tell you whether that premium is justified.
• Assuming a low price is always safer. The hypothetical distributor had initially priced low to win business and continued doing so after the original rationale had passed. Review prices below the market as carefully as those above it.
Competitive Pricing Analysis FAQs
What Is a Competitive Pricing Analysis?
A competitive pricing analysis is a regular comparison of your prices with the products your buyers would consider instead, normalized to the same unit and terms. It shows each gap as an index against a target, so you can decide whether to hold, test, or move.
How Do You Calculate a Competitive Price Index?
Divide your price per unit by the volume-weighted average price per unit of your competitive set, then multiply by 100. A result of 100 means parity, and a result of 110 means you are 10% above the weighted competitor price.
What Data Do You Need for a Competitive Pricing Analysis?
For a competitive pricing analysis, you need a product map, comparable prices, and unit volumes for weighting the competitor benchmark. For consumer goods, syndicated scan data can provide prices and sales volumes together. Retailer sites, catalog scrapes, quotes, and win-loss records can fill gaps, particularly in B2B. Make differences in coverage visible.
How Often Should You Update a Competitive Pricing Analysis?
Monthly is a practical starting point for a competitive pricing analysis in most categories, with weekly reviews during a price move or an active promotional season. Update the product map whenever a pack, specification, or relevant competitor changes.
Is It Legal to Track Competitor Prices?
In the US, independently monitoring public prices for a competitive pricing analysis and making your own pricing decisions is generally lawful. Agreements or coordination with competitors raise antitrust concerns. Do not exchange nonpublic pricing information with rivals, and ask counsel about scraping terms, confidentiality, and data sharing where relevant.
Should We Always Match a Competitor Price Cut?
No. Check that the competitive pricing analysis is valid, understand how long the gap is likely to last, and look for an effect on the business. Then estimate the profit impact of a response. The additional volume needed to recover the cost of a cut may exceed what your elasticity estimate supports.
Competitive Pricing Analysis Checklist Before the Next Price Review
• Start with the buyer. Compare against what they would really choose instead.
• Normalize first. Compare equivalent units and terms before interpreting a price difference.
• Track regular, promotional, and weighted average prices. Promotion frequency can change the comparison substantially.
• Agree on the target. Assess each gap against the position you intend for that product group.
• Calculate the profit impact. Check whether the likely volume response justifies the price change.
• Assign an owner and a review schedule. Keep the product map current and record why each decision was made.
How Revology Helps With Competitive Pricing Analysis
We help finance, sales, and pricing teams build a competitive pricing analysis process they can keep using. That includes the product map, index, and target ranges in your own environment, along with the elasticity and margin analysis needed to evaluate a response. We build the capability, hand it over to your team, and charge no license fee.
If competitor price gaps are affecting your 2027 plan, a two-week pricing diagnostic can help you assess the data you already have and the questions it can answer. Talk to our team about starting with your priority product groups.
