Regardless of your industry or business type, you must deal with competition. Competition changes how you operate and behave in the market. When trying to get a step ahead of competitors, businesses develop different strategies to beat their rivals. One of the most popular strategies is the blue ocean strategy. You can check here for blue ocean strategy examples. Coping with the competition requires a lot of planning and a broad perspective. While many businesses focus on product quality, other things can increase your product demand and give you a competitive advantage. This article will discuss the significance of price in the war of competition, and how to overcome it without endangering your brand.
What Can Be Done?
The primary strategy most competitors use is cutting down prices to get more customers. However, this is a war that you should never start. The best thing to do, rather than focusing on price, is to make your product unique for customers to understand its value. For instance, the Tesla Model 3 goes for as low as $40k, a price you don’t expect for such a luxurious car. However, Tesla has made the most profits. The main reason is not the price but the value of the vehicle. Here is how you differentiate your product.
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Re-targeting Audience
Customers measure the quality of a product by its price. Therefore, they perceive the quality is low when the price is also low. That means lowering the cost is not the best strategy in gaining their loyalty. The best thing you can do is to re-target the audience by repositioning your product in the market. Therefore, you need to insist on the value of your product to give your customers a better reason to buy from you. Convince them that the higher-priced items are worth their money.
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Customer Segregation
Generally, customers fall into three classes: upper class, middle class, and lower class. Each level has different sets of economic resources and perceptions. Beating competition based on price will only put you on the lower ladder. The more you lower the cost, the less appealing it will be for the upper class and middle class and the more enticing it will be for the lower class. Know who you are targeting. Determine the value of your product, and people who are more likely to use it, and focus on that.
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Product Differentiation
Another perfect way of gaining a competitive edge is being clever with competitive pricing. Know what your competitors are selling for a similar product and lower or raise your price based on their prices. It is always crucial to ensure you have a competitive price that is better than your competitors. However, you need to evaluate your goals to know which price will work better.
Takeaways
When you are unsure how to beat the competition, remember there are many ways of doing it. You need to provide better pricing without jeopardizing your company or the success of your product. The markets keep changing, so you must closely monitor prices and competition to stay ahead of the competition.
