Imagine that your profit from every customer is $1 and your competitor’s profit from every customer is $5. Let's pretend that your goal of luring some of your competitors customers was successful.
However, this also means you’re getting to work more for less and less. In the first place, you’ll need 5 times more customers to get the same profit as your competitor. 5 times the work and 5 times more customers to look after.
On the other hand, your competitor can devote more time to strategize and increase value rather than finding more sales. Moreover, it also means that you have to cut costs to maintain profitability. If this keeps continuing, can you maintain your own quality of your product?
The question you may be thinking is that if you don’t have the lowest price, people are not going to buy my product.
That’s a total misconception!
Yes, some people may not buy. But do you really want these picky customers that shop based on the lowest price? If you had a choice, I’m sure you won’t. They will always be loyal to price first. They will always going to be looking for you to give them further discounts or be lured by the competitor who can.