Competitor prices. Is the price is right?

Octopus 16/03/2020

Competitor prices

It is possible that they are buying the market share, and they will not be able to sustain it. Your sales team may be telling you this too. However, just saying statements about your competitor does not make it right. Buying market share by reducing prices rarely lasts long, and it is not a very smart strategy to attract customers long term. Buying the market happens a lot less than people think.

It is possible that your rivals may hold a significant cost advantage over you. You have to do something but armed with intelligence, not hearsay. Take a look at your cost structure and then compare them with your competitors. Or Benchmarking as its called.

Compare yours and their labour costs, materials, technologies used, distribution, the cost and structure of the sales and marketing teams. Look for usually looking overheads and obvious omissions.

What about suppliers?

Are their products really like for like? Does your product have certain features, but do your customers care about them enough not to switch sides? Also, are the prices really like for like. What about their extras?

Analyse the results and get a better picture of what’s going on, why its happening and then decide what you can do about it. Then tell the world.

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