When sales fall, changing prices and holding discounts and promotions is usually the first step companies take, but it is often done without considering the possible consequences.
Friday, June 1, 2018
In his article on pricing strategies in times of crisis, the expert in price management, Ariel Baños, explains the reasons why lowering prices is not always the best solution in a scenario of slowing sales.
Although it looks like the quickest option, as prices can be changed almost instantaneously and with little effort, the effects it can have in the medium and long term can be even more harmful than the reduction in sales.
What can happen when you decide to lower prices?
"...Once prices are reduced, there follows a lot of resistance on the part of customers when trying to return to the previous level."
"..It's the easiest variable to imitate, competitors can quickly follow it. "
"..The impact on the result of a price reduction is very high.It is not enough to maintain volume or slight growth. The new scenario must be carefully analyzed. Sometimes a better result is to accept lower volume, but be able to maintain price."
Read thefull articlein Fijaciondeprecios.com (in Spanish).
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If the products and services sold include aspects that are highly valued by customers and our prices have evolved below market rates, it means that it is feasible to raise marketing prices.
Ariel Banos, founder of Fijaciondeprecios.com, describes the signs that should be analyzed by businessmen at the moment of applying an increase in the prices of the products and services marketed.
Avoiding hurried discounts, managing price increases according to costs and improving cash flow are some of the strategies that companies can resort to protect their profitability in contexts of inflation and recession.
Ariel Baños, a price management specialist and founder of Fijciondeprecios.com, explains four strategies for maintaining profitability when companies face scenarios of rising prices and low dynamism in economic activity.
Making real sales projections, segmenting prices and designing savings options are some of the strategies that companies can use to protect their profitability in contexts of inflation and recession.
Ariel Baños, price management specialist and founder of Fijciondeprecios.com, details techniques that could help companies avoid negative effects on their finances, when faced with scenarios of rising prices and low dynamism in economic activity.
Price is a variable that firms can and must act on, because the impact of the outcome greatly exceeds traditional variables like costs or sales volumes.
5 immediate actions to take control of the price of your business
By Ariel Bathrooms, Fijaciondeprecios.com economist. Author of " Los secretos de los precios” (Secrets of prices)
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