Recently, we came across an interesting article in the paper related to Tesco chasing sales and volume as against margin and profit. This happens in many companies when they grow bigger and the market becomes competitive. For the smaller organisation who cannot hope to compete on price, it is important to understand the true value of the product and services and not to be price bashed.
Price bashing in the form of ‘what’s the discount’ is practised by many organisations, driving the price down and often dumbing down the quality at the same time. For the smaller operator, think of the value of your product and what customers would expect to rightly pay for it.
Position your products against the real value it will have for the customer whether that is less downtime, faster production, longevity, fewer returns etc.
Sometimes being told you can buy cheaper elsewhere does not mean that customers are comparing like for like. There is a growing feeling that we are all brainwashed into asking for discount when in actual fact we are looking for value for money!
For more information and how to create relevant market price point strategies, contact RFM.