Competitor drops 15%. Match, hold or bundle? Simulate before you react.
Competitor drops 15%. Match, hold or bundle? Simulate all three against your real margin and volume sensitivity before you react — including the response that quietly costs the most: matching without a reversion date.
Hold: units fall by (sensitivity × drop)%; contribution falls with volume. Match: volume holds, margin resets. Bundle: volume falls less (retention factor), margin falls by the bundle cost only.
All three scenarios show weekly contribution versus today; the best is flagged.
Matching below variable cost is hard-flagged. The reversion rule is mandatory: 'when the rival returns to X, we return to Y' — agreed before you move.
Illustrative figures, not a client outcome.
Then it isn't a price, it's a subsidy — and subsidies end. Hold, differentiate, and watch their unit economics do the work. Never match below contribution zero.
From your own price-change history if you have it; otherwise start at 0.8 for comparable products, 0.3 for differentiated ones, and refine with the next real event.
Version 1.0 · Reviewed 2026-10 · Methodology is fixed and version-controlled; results depend on your inputs.
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