Building a competitive strategy is a key part of writing a marketing plan. Price is part of the marketing mix: focus your efforts on building a competitive product pricing strategy for your business. There are alternatives to cutting price: discover six effective pricing strategies.
In business, pricing strategies dominate as the Number One competitive strategy. Why?
Because in small, medium and large businesses, the easiest, and most often used, strategy is to reduce price.
In many businesses and industries it is the first, and sometimes the only, strategy used (build an alternative strategic plan that takes a different approach).
However this cutting-price strategy, while appropriate in some cases, is the most costly, the most disruptive to the market, and the hardest to reverse.
Once you have lowered the price, moving price back up to where it should be (and needs to be to survive and prosper) is next to impossible.
Small business competition is fierce and aggressive. Small business owners need to focus on how to enjoy successful competition in business. Yes, competition can be enjoyable and there are some surprisingly effective, and fun, strategies to try.
Match or exceed your competitor's strengths: for example, focus on your service advantage, quality advantage, product differentiation or services with new and/or differentiating features.
Know your competition and challenge them in areas where they are weak; and you are strong. Make sure that you conduct both an industry analysis and competitive intelligence to understand your competition.
Now that you know your competition's weaknesses, focus direct attention on those weaknesses. Focus on your competition in business.
Simultaneous competitive strategic plan checklist for initiatives on many fronts
This will throw your competition completely off-balance as they don't know what to respond to first. It will also divert their attention from one tactic to deal with, to many; and it will be hard from them to win on all fronts.
Avoid head-on competition and move to less competitive ground
Unconventional Competitive Strategy
For example, unpredictable raids on customers with tactics such as occasional and random service changes, product changes, even price changes; inconsistent and unpredictable and hard to follow or copy along with strong promotional and marketing activity. Your focus as a business using this type of offensive is to have your ear to the ground to learn when competitors have had delivery issues, service challenges and/or quality problems; then build your competitive strategy around what you've learned.
A Defensive Competitive Strategy (also known as pre-emptive)
Many businesses use pricing strategies as their first, and primary, competitive strategy. However they often don't move past cutting prices and using better, more effective strategies.
When writing a marketing plan, you need to focus on best-fit strategies for your specific business. Consider specific marketing mix strategies (such as a product pricing strategy or a product positioning strategy) that are right for the products or services you are marketing.
Building the right competitive strategy for your business means trying a new approach to business competition that will work for you, and help you to make a profit.
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Find other Pricing Strategies and review alternative pricing techniques.
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Pricing is the foundation of your business success.
Interestingly many businesses focus on either building their price structure by using costs as the basis OR by using market information (that is, what the market will pay).
The reality is that the price needs to be constructed with both costs and market forces as part of the consideration. Additionally, the product or service value (ranging from commodity to luxury) plays a role in price strategy.
Building a strong pricing program is part of your marketing mix activities (product or service; promotion; place or location; and price). Many businesses focus most of the marketing attention on developing the product or service program and then promoting it; make sure you give price the time and attention it needs.
Businesses need to be more aware of the power of competitive and comparative markets than ever before.
Because technology and the internet makes pricing information available 24 hours a day, 7 days a week.
Customers use their mobile phones, laptops and even desktops to price check and compare.
The speed of pricing changes makes this an urgent action item for all businesses.