Of course, the strategy of most companies is obvious – making money. Together with the price sensitivity of the consumer comes the company’s pricing strategy. The majority of small business owners strive to offer products and services at the lowest cost and to label their products so that they are better or at least complete. In the real world, walking is often a bad idea. So try to compete on price only. Competitive prices are not always sustainable.
Most businesses have the checkbook in order to keep their costs lower than small businesses and to keep their prices low for an extended period of time. By selling for price only, companies can be undercut and taken out of business, simply on the whim of a larger competitor.
Faster, better, cheaper – the old saying goes that customers can have two of the three, but not all of them at the same time. Competition is not just a matter of pricing, but making informed pricing decisions is an integral part of any business strategy.
Make the right decisions
In order for businesses to survive and thrive, owners often need to adapt and change their tactics to stay competitive in an ever-changing marketplace. Instead of focusing on being the cheapest on the market:
1) Consider the market and the population of the buyers
2) Put the sales pitch on the most common segments or groups of buyers
3) Examine the structure of demand in the niche and adjust prices accordingly
4) Avoid price wars