New Market Rules and Low Prices

With the change in the configuration of the markets and businesses, companies must think clearly, adapt to the new rules of the game and avoid, as far as possible, immediately implementing the policy of low prices.

Friday, September 11, 2020

The economic crisis resulting from the outbreak of covid-19 has changed the rules of the game in the markets at a global level. Some companies, in their attempt to stay in business, have opted to lower their prices, even to levels where they could incur losses.

In the new reality it is very attractive to make aggressive bets to maintain sales levels, however, that can cause inappropriate signals to be sent to consumers through low prices.

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For David Gomez, author of the book "Negocios Inmortales", in the new commercial reality the price should not be "... the only variable and businesses do not have to give themselves away. If you have something nice and solid, you should not fall into the temptation of burning prices and burning inventory, your value proposition should not just be cheap."

In the new business scenario there are companies that migrated from sales in limited geographical areas to the challenge of covering larger markets, being the home delivery system one of the most complex challenges.

Gomez points out that "... there are small businesses that used to sell to the neighborhood and now sell to the entire city by home delivery. We have to redefine the value proposition, refinancing, distribution and even go to disintermediation'."

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The delivery service can become a differential of the proposals. reviews that according to the author of the book "... 'many companies can say that they deliver at home, but not all of them make a differential delivery, on time, with the same conditions or biosecurity standards."

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