price follower

Price follower

Let’s start off by classifying what a price follower is:

A business or brand that closely monitors and responds to the pricing decisions made by the price leader in the market can be called a price follower. Rather than setting the benchmark price, these businesses analyze and adapt their pricing strategies to stay in line with the prevailing market rates. By observing and mimicking the pricing practices of price leaders, the followers aim to remain competitive and retain their market share.

Benefits of Being a Price Follower:

  1. Market Adaptability: Followers have the flexibility to adjust their prices in response to the pricing strategies of Price Leaders. This adaptability allows them to remain competitive and responsive to changing market dynamics.
  2. Reduced Risk: By benchmarking and observing the price leader’s pricing decisions, businesses can mitigate the uncertainties of pricing and make more informed decisions.
  3. Competitive Positioning: Price followers can position themselves as providers of comparable value at a slightly lower price than the price leader. This strategy can attract price-conscious customers who are seeking similar products or services at a more affordable rate.
  4. Market Insights: By closely monitoring the pricing strategies of the price leader, businesses gain valuable market insights. They can analyze customer preferences, market trends, and competitor behavior to refine their pricing strategies and improve overall business performance.
  5. Customer Perception: Price followers can leverage their pricing strategy to position themselves as an alternative to the price leader. By offering similar products or services at a slightly lower price, they can appeal to customers seeking competitive pricing without compromising on quality.


Implementing Price Follower Strategies: 

  • Conduct thorough market research to identify the price leader and understand their pricing strategies.
  • Continuously monitor the market and competitor pricing activities to make timely adjustments.
  • Emphasize value-addition through customer service, product quality, or additional benefits to differentiate from the Price Leader.
  • Communicate the value proposition effectively to customers, highlighting the competitive pricing without compromising on quality.


Being a price follower in the e-commerce and retail industry allows businesses to stay competitive by closely observing and adapting to the pricing strategies of the Price Leader. It enables them to respond to market dynamics, position themselves as alternatives to the Price Leader, and appeal to price-conscious customers. By implementing effective pricing strategies and leveraging market insights, businesses can thrive as price followers and maintain a strong market presence.