The easiest answer is also the hardest to hear.  Don't base your business on the price of the product.  Base it on service to the customer.  Anyone can beat you when price is all you have to offer.  What service are you providing?  What benefit is it to the customer to do business with you?  What do you have that no one else has?  Customers don't want to leave just to leave.  They leave for a reason.  Usually it is because you don't want to make them stay.