Comparative price analysis can produce consistently accurate data to help businesses grow. We’ll be answering key questions such as:


How do businesses set the price for their products? Do they experiment or research on what the fair price is? Do they use sufficient data to support their price adjustment decisions? What are the strategies for price analysis?


Comparative Price Analysis – What is Price Analysis?


Price analysis determines the price of the products and/or services in the product cycle. B2B pricing analytics show how the product, distribution, price, and promos work together to create an effective marketing strategy and product recall.


Price action and volume analysis are used to develop a price strategy. This includes a mixture of product lines or strategies for a new product price.





Comparative Price Analysis: What Is The Difference Between Cost And Price Analysis?


Cost and price analysis are two different thoughts to decide on the appropriate value of products or services prior to purchase.


Cost analysis is the projected price based on the subcontract work done on the product. Whereas in price analysis is the projected price on the evaluation of the new products in test marketing and placement strategy.


Another good example is what do business executives use to find trends in the market. They use volume price analysis and price ratio analysis to predict where the market is going.


The volume price trend analysis gives an overview of the machinations of the market in relation to supply and demand. The fluctuations between the supply and demand are the basis in making the right decisions to sell or buy. With the data from the market trends, you can predict where the price is going and act accordingly to increase profits.


Often, price analysis experts and pricing professionals complain about the quality of the data they need to organise before an analysis can be performed. In nearly every case we’ve seen, the data coming out of corporate systems (see blog on pricing software tools) is incomplete, inconsistent, untidy, non-uniform, and requires a methodic approach before it can be studied.


This “data cleanse” is often seen as a necessary evil i.e. something that must be done to get to where we would have liked to be in the first place. Limited value is placed on it other than as a means to an end.


We have numerous examples, however, where data enables more than price analysis. It also creates a “viable client value” in its own right. This is particularly pertinent to B2B firms where products or services are purchased by a professional procurement specialist.


The problem here is there are no soft data skills like comprehension of the problems in the commercial sector and relying more on the decision-makers to describe the data into comprehensible information. These issues must be communicated to those involved in analysing all the data.


Without the right expertise, the methods and people who work on the data analysis will fail. More often, price analysts immerse themselves in finding patterns in the data stream. There’s no solution given since they are isolated from the everyday operations of the company. That’s why hiring the right analysts and embedding them to the daily grinds of the business can provide an insight into the problems and will help to improve the company.





 Proper Price Analysis Done Right


  • Inculcate the business goals to the analysts and chart their progress. Though the results will take some time, you can expect real information on cost savings, new revenue, improved customer satisfaction, or risk reduction.


  • Get the right pricing analysts and assign them to departments that need their expertise. With their knowledge of the daily operations, they provide solutions to improve the company.


  • Clearly describe the problem to the analysts. Not to be muddled by office politics, fear and conflicting agendas by those making the problem. A clear cut description of the problem can provide a simple and effective solution.


  • Teach the non- price analysts about proper data analysis. Select the people who work in the daily operations of the company and seek their suggestions while working with the management for better decision-making.


The ability of the company to handle the massive data and using that information is essential for its success nowadays. It cannot survive without using the necessary data to continue its business. In fact, less than half of the company’s data is used in decision-making and far less than 1% of that data is actually read.


How does the company process the data for B2B pricing analytics? Quite simply, having a chief data officer (CDOs) and data-management functions would be ideal. But without a clear agenda for organising, governing, analysing, and deploying the organization’s information assets, it will fail.


Different Approaches To Pricing Analytics


There are two schools of thought for securing data management:


  • Data defence – used in downsizing risks that include following government regulations on data privacy and financial reports integrity, detecting and eliminating fraud, and preventing theft with detection programs. This also ensures security on data flow in the company’s system by authenticating sources such as customer and supplier information or sales data in a single source.


  • Data offence – concentrates more on increasing revenue, profitability, and customer satisfaction. It gathers information on customer insights on their products to help in the decision making of the management. It is more focused on activities such as sales and marketing in real-time than data defence.


There Must Be Balance


Both data offence and defence are crucial to the success of the company. But striking a balance between the two to be effective, depending on standardised or flexible data. If the data is uniform or straightforward, it is analysed for security or government compliance – for example, in health service or insurance. If the data is flexible, it focuses on improving the business.


Take Apple’s comparative price analysis, for instance. The data defence is analysed if the product is complying with the government’s regulations on smart devices. If not, the government will impose restrictions, hence affecting its price. If the phone’s system gets easily hacked, nobody buys it. Thus, security measures are in place in the device. Whereas in data offence, the information regarding the ease of handling is what the user sees in the apps and its price.




Benefits of Pricing Analytics – “Do not focus on the price of light bulbs”


Pricing teams will often argue that a customer should not focus on the price of unit rates i.e. the individual light bulb, but the cost to light the room over the year (i.e. the total cost of ownership for lighting.) In itself, this is a completely sensible approach.


We have seen many instances where this approach falls flat because the pricing manager is unable to tell the customer how much they will actually spend over the year (i.e. they can not demonstrate that the total cost of ownership approach is more cost-effective.)


The most common reason for the failure to do this is non-uniform data. By cleansing data for pricing analytics, it can be accurately calculated and demonstrated for financial and other aspects of long term contracts.


We have seen companies gain assurance over the likely total spending relating to customers and use this in sales and marketing. As pricing/cost volatility can be one of the bigger risks when buying a service, a sales pitch that guarantees a cap on the possible price is very appealing. This is seen in how mobile phone plans are priced where customers pay more than they need to cap their spending (i.e. unlimited minutes etc.)




  • B2B pricing analytics are effectively used when massive data is sorted and turned into useful information. The pricing team analyse and find the fair price for the item.


  • B2B pricing analytics uses data defence and offence to balance the factors to find the proposed price.


  • Pricing teams need all the information from the responses of the consumers and competitors’ price comparisons to analyse.


  • Soft data skills are needed which some pricing teams often don’t have in the organisation process. They are often too technical and lose focus on why they’re organising the data in the first place.




  • Data gathering need not be a burden just because it’s too massive to tackle. It just needs to have the right program and trained people to sort it all out.


  • Comparative price analysis is a group effort for the pricing team. They must contribute to the improvement of the company and explain the business aims to them.


  • Start teaching the employees on data analysis so the data flow is easier for management teams.


For a comprehensive view on building a great pricing team to prevent loss in revenue,.

Download a complimentary whitepaper on How to Build Hiring Capability To Get The Best Pricing Team


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Pricing College Podcast