In business there are good and bad times but how you react to every situation in your business determines the faith of the business. Because of the competitive nature among businesses, in order for you to make profit you must adopt different strategies to compete and to be on the winning side. When a business is faced with high level of competition, most businesses adopt the ‘price war strategy’. In this strategy the competitors are fighting for market share. That is, business owners try to win customers by cutting down of prices for products and services. However, this strategy can also be dangerous to the business since the profit margin of the business will reduce and if care is not taken the business might fail. Therefore, this strategy is highly recommended when you have a low cost of production.
In as much you might be tempted to reduce the prices of your products/services when faced with competition, it is not the best solution but you can battle this by adding an extra value to your products/services. Below are some of the things you can do to increase the value of your products/services:
Retargeting your Market
There are three levels delineating the market of today. These include; the lower, middle and the upper class levels. Trying to compete with your competitors by cutting down the prices of products/services indirectly forces you to the lower level of the market, thereby making you to lose the middle and the upper class. That is, the more you reduce the prices of products/services, the more the lower level of the market becomes interested and the lesser the middle and the upper class. Although the lower class forms the greater majority of the today market, it is not very advisable to reduce the prices of the products/services unless you are targeting them. This is because most people are of the opinion that the lower the prices, the lower the quality of the products/services. Therefore, retargeting your market is one of the best options if you can’t find a way to produce your products at a lower cost, in order to lower your price and to increase your profit. Retargeting your market is all about positioning products/services to please a particular market class. This is because, whenever you decide to produce something with a high quality, only the middle and the upper class market are interested in it. However, consumer commodity appeals to all the three classes, easy to use, consume every day and are fast selling.
Create a difference with your Branding
Making a different in your branding is what determines your retargeted market. Your brand is what makes the different in your products/services. You must be able to create a special feeling about your products/services in the hearts and minds of your customers. While your competitors are concentrating on selling a particular product or service, you must not just focus on that also but you must focus in making your offer unique in terms of quality from that of your competitors. Show your customers how unique and useful your product is right from product packaging to your customer services. When carrying out an effective branding, it makes the customer to buy your products/services in such a way that you are going to make profit and they also will be very satisfied and happy. Your branding should tell a compelling story and should mean something important to your target market.
Your business should be results oriented. That is, you should be able to design products/services that will target the need of the customers. Helping your customers have the result they are looking for will attract them the more to your business and they will not even border about the price. People want product/services that will meet their need and most often they don’t really care about the price but they want the benefit from your products/services.
Therefore, when doing marketing, your message should be centered on the real result that will help meet the need of your customer. This will eliminate the issue of price and will focus the attention of the customers to the direct benefit of the products/services. When you do this your products/services becomes a commodity instead of a brand.
Try to win more customers
Instead of concentrating on the price you should instead concentrate on how to win your customer. You can do this by giving some of your products/services to top and trusted customers for them to use and pay later. By so doing, you create an impression in them that you are very bold and sure of your product/services, thereby giving you some advantages over your competitors. Another strategy that you can also use to win customer is to give them free trial for your products and services. This will give the customers the opportunity to taste the products and services in order to find out if it meet a need or solve a disturbing problem that they have been going through. Should in case the products/services meet the need of the customer, he or she is now focus on the benefit of it and the price will no longer be an issue
To be able to compete and still make profit, without being at the bottom, then your thinking and your doing should be different from that of the competitors in order to position your products/services at the fore front of the market