All businesses strategize in order to capture customer interest to hopefully drive sales upwards. There is not one strategy that will work for all. It all depends on the image a business would like to project for itself. The projected image and the chosen strategy must agree with each other so as not to confuse the buying public.
An example of a business marketing strategy that is not exactly the best option at all times is going for the lowest price. There is a general belief that the lowest price is the most attractive to the eyes of consumers. This belief needs to be qualified to avoid committing a mistake that will be very difficult to correct at a later time.
A low price can be perceived in two ways. Products with a low price can either be seen as value for money or as an inferior and cheap product. An exceptionally low price is always suspect to some hidden agenda especially if economies of scale would indicate the impossibility of earning from such a price. After all, businesses survive on profit. If it is selling at a loss, then there is not much sense in doing business.
Offering to sell at the lowest price can be done effectively by establishing first the level of quality of the product. If it is able to place itself in a position where the product is synonymous to quality and then offers the lowest price in the company of equally leveled competitors, then it becomes an effective business strategy.
Often times, the highest price can be commanded by unique products having no identified competitors. In niches where there are many competitors, the tendency to dive to the lowest price is stronger. When the lowest price is not a viable option for a business, it would be best to aim for product differentiation which can be provided by either quality, added service, and unique product features.
Originally posted on June 27, 2012 @ 3:11 am