SBA Business Plan Workbook

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4. What have you learned from their operations? from their advertising?

5. What are their strengths and weaknesses?

6. How does their product or service differ from yours?

Start a file on each of your competitors. Keep manila envelopes of their advertising and

promotional materials and their pricing strategy techniques. Review these files periodically,

determining when and how often they advertise, sponsor promotions and offer sales. Study

the copy used in the advertising and promotional materials, and their sales strategy. For

example, is their copy short? descriptive? catchy? or how much do they reduce prices for

sales? Using this technique can help you to understand your competitors better and how

they operate their businesses.

2. Pricing and Sales

Your pricing strategy is another marketing technique you can use to improve your overall

competitiveness. Get a feel for the pricing strategy your competitors are using. That way you

can determine if your prices are in line with competitors in your market area and if they are

• competitive position

• pricing above competition

• price lining

The key to success is to have a well-planned strategy, to establish your policies and to

constantly monitor prices and operating costs to ensure profits. Even in a franchise where

the franchisor provides operational procedures and materials, it is a good policy to keep

abreast of the changes in the marketplace because these changes can affect your

competitiveness and profit margins.

Appendix 1 contains a sample Price/Quality Matrix, review it for ideas on pricing strategies

for your competitors. Determine which of the strategies they use, if it is effective and why it is

effective.