How to Compete Against Low Prices

The right choice of the marketing system and the partners who will sell the product is key to compete profitably with other options with lower prices.

Friday, February 8, 2019

Ariel Baños, price management specialist and founder of Fijaciondeprecicios.com, explains how through proper marketing, it is possible to compete against the prices of companies manufacturing their products on a large scale and at lower cost, such as those made in China.

Sometimes the main differential of our proposal is not the product or service itself, which may not even differ much from the competitors, but the business model or marketing system we use.

To choose the stores where to sell, it is necessary to evaluate variables such as location, population in the coverage area, exhibition space, among other aspects. It is necessary to have a controlled commercialization, so as not to cannibalize the product and protect its current sales points. Choosing our commercial partners is fundamental for them to transmit in the best way the value of our proposal, and consequently we manage to defend the sale prices.

Displaying in special spaces in stores, with furniture supplied by the company, helps to highlight the presence of the products and puts them in the hands of potential customers. In addition, special care is given to the packaging of products when they are purchased by the end customer. Taking care of the details of the customer's experience with our product or service, helps to reinforce our strategy of distinction in an increasingly competitive market.

When our proposal has real differentials, which are notorious for customers, we should not be afraid to charge prices in line with the leading brands in the market (or even more).

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Pricing Strategy: What NOT to say

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"The cost determines my selling price" and "let's lower prices to win customers and then start raising them" are some of the phrases that should be avoided when designing a pricing strategy.

Ariel Banos, founder of Fijaciondeprecios.com, has identified five phrases that are dangerous and that companies should avoid applying when designing their price management strategy.

Prices: How to Decommodify our Proposal?

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"If we overcome the mental barrier of commoditization, identifying and communicating those added values going beyond our basic proposal, we will have the opportunity to take our profitability to another level."

Ariel Banos, founder of Fijaciondeprecios.com explains that when a proposal is a commodity, in other words, it lacks differentiation with respect to others offered in the market, the only alternative is to align itself with the prices charged by competitors. There are no magic solutions.

Prices: Intelligent Strategies to Improve Profitability

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Applying segmentation techniques, making comparisons with the prices of other products, and applying discounts to customers who have eco-friendly practices are some of the strategies that can help maximize the sales profitability.

Ariel Baños, a price management specialist and founder of Fijciondeprecicios.com, explains how simple techniques completely applicable to any business can be turned into intelligent and creative pricing strategies to maximize profitability.

Keys to Stop Competing for Price

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Identifying a segment that values the differentials of the product or service and charging a price aligned with the company's strategy are essential to avoid competing with the lowest prices in the market.

Ariel Baños, specialist in price management and founder of Fijaciondeprecios.com, explains how through the implementation of an appropriate strategy, it is possible to compete in a market where there are suppliers who charge derisory prices.

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