Competitive pricing is a strategy where businesses set their prices based on the prices of their competitors. This approach helps companies attract customers by offering similar products or services at lower prices. By monitoring the market, businesses can adjust their prices to remain appealing without sacrificing their profit margins. This pricing method is commonly used in industries like retail and technology, where many options are available for consumers. Companies often analyze their competitors, such as Walmart or Amazon, to determine the best price points. This ensures they stay relevant and competitive in a crowded marketplace.