How to Integrate Pricing Intelligence in CI Systems

In the summer of 2000, when I was introduced to our general manager as a new hire in a pricing analyst role in an FMCG company, he asked me what is more important when setting up the price for a product: the market or the cost? It was my first job so I didn’t have a clue of what “pricing” is supposed to be, but since the job for I was hired was in the marketing department of that company, and the marketing manager was sitting next to me, I made up my mind and answered: “market”. At which he reply to me: “Well, Iet’s make sure that you will spent at least the same amount of time on the market as with the accounting department”.

So, the “market” half of my job meant tracking competitor prices on a weekly basis (and some times even daily), while the “accounting” part was to read lots of cost break-downs by products’ ingredients. They were called “receipts”, printed on a dot matrix printer and were delivered in flesh by a what then seemed to me “an old guy” in a blue lab-coat. But I digress.

Back then, gathering pricing intelligence meant physically visiting stores by driving around the city and recording prices by pencil and paper, then coming back to office, introducing them in a spreadsheet, comparing them, analyzing trends, and of course feeding them to my managers. My van-salesman driving style originates in those times and my knowledge of some of the most obscure neighborhoods of the city was a side gain.

Despite the labor-intensive process, those early experiences taught me the value of pricing intelligence as a crucial part of a broader Competitive Intelligence (CI) system. It wasn’t just about comparing prices; I needed to assess their pricing strategies, understand what drove their pricing decisions, and predict future price movements. This experience laid the foundation for what would eventually become an important part of my understanding of competitive intelligence (CI).

Why Pricing Intelligence Matters

Pricing intelligence is a vital component of a CI system. It involves the process of gathering, analyzing, and applying data about competitor pricing strategies to inform your own business decisions. For product managers and entrepreneurs, tracking competitor prices can provide essential insights into how the market perceives value, what consumers are willing to pay, and where there might be opportunities to differentiate or optimize pricing.

And it is a vital component of a CI system because:

• It helps businesses stay competitive – Knowing how competitors price their products allows companies to adjust their own pricing strategies accordingly.
• It reveals market trends – Frequent price fluctuations can indicate changes in consumer demand, cost structures, or supply chain disruptions.
• It supports profitability optimization – Understanding how price changes impact sales volume and margins helps businesses find the right balance between competitiveness and profitability.

Pricing intelligence serves as a direct window into competitor strategies and market trends. By analyzing competitors’ pricing, you gain insight into their product positioning, target customers, and market perceptions. For instance, if a competitor suddenly slashes prices, it might indicate an attempt to gain market share, clear out inventory, or react to increased competition. Understanding these moves allows you to adjust your own pricing strategy proactively, rather than reacting to market shifts after the fact.

How to Implement Pricing Intelligence in Your CI System

A robust CI system integrates pricing intelligence into broader business decision-making processes, ensuring that pricing strategies align with market realities. For example, if your competitor raises prices across the board, this could signal confidence in their product or a response to increased costs. Alternatively, frequent price changes could indicate an unstable market or that the competitor is struggling with customer retention.

Here are some steps to follow when integrating pricing intelligence in your CI system:

1. Define Your Objectives: Just as you would with any other intelligence gathering, start by defining clear objectives for your pricing intelligence. Are you trying to understand trends, track competitive price shifts, or find opportunities for value-based pricing? Knowing your goals will help you focus your research efforts.
2. Track Competitor Prices Regularly: Establish a routine for monitoring competitor prices. This could involve tracking online pricing, visiting physical stores, or using specialized software to gather data. As I did in the early 2000s, having a process to consistently collect pricing data will allow you to spot patterns and identify trends.
3. Evaluate Pricing Strategies: Understanding not just the price but also the context around the price is critical. Look at the frequency of price changes, the seasonal fluctuations, and the reasons behind discounts or premium pricing. Compare your findings to your business’s pricing model to see if there are any gaps or opportunities for improvement.
4. Integrate Pricing Intelligence with Other CI Data: Pricing intelligence doesn’t operate in isolation. Combine your findings with other forms of CI, such as market trends, customer feedback, and competitor product developments. This integrated approach will give you a more comprehensive view of where you stand in the competitive landscape.
5. Adjust and Refine Your Pricing: Use the insights from your pricing intelligence to adjust your pricing strategies. Whether you decide to introduce promotions, raise prices for premium offerings, or fine-tune product bundles, having a data-backed understanding of competitor pricing will help you make informed decisions.
6. Use Technology to Scale: While manual tracking can work, especially in industries with rapid price fluctuations, using pricing intelligence tools like Price2Spy, Wiser, or Competera can help automate and scale your efforts. These tools provide real-time data, making it easier to adjust your strategies on the fly.

Final Thoughts on Pricing Intelligence

Incorporating pricing intelligence into your competitive intelligence system allows you to gain a deeper understanding of your competitors and the market. Pricing is a powerful signal in any industry, from FMCG to financial services, and by keeping track of competitor moves, you can stay ahead of market shifts and position your business more strategically. Remember, the key is consistency.

And if all else fails, just price your product at $9.99—because somehow, that always seems to work!