"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.
In Costa Rica, the price indexes of buildings and social housing registered in the seventh month of the year, year-on-year variations of -1.07% and -0.81%, respectively.
From the report of the National Institute of Statistics and Census:
Due to weak competition in the local market, the prices of goods and services in the basic basket are significantly higher in Costa Rica than in nearby countries.
A report by the Organization for Economic Cooperation and Development (OECD), called the "Economic Study on Costa Rica", concludes that consumers in the country pay higher prices for milk, rice, vehicles and Internet services.
Segmenting customers by prices they are willing to pay, showing the value of the product or service to charge higher prices and being careful when applying discounts are some of the recommendations from experts to avoid losing money.
Ariel Banos, founder of Fijaciondeprecios.com explains some of the myths that exist among business leaders when building a pricing strategy, and what could be the alternatives to not lose money.
Explained by the uncertainty reported in the markets due to covid-19 disease, in June 2020 the global food price index registered a 2% variation from the previous month.
The Food and Agriculture Organization of the United Nations (FAO) reported that due to market uncertainty caused by covid-19 disease, prices of vegetable oils, sugar and dairy products rebounded to their highest level in several months after sharp declines in May, while in the cereals and meat markets most prices came under downward pressure.
In order to reach customers who, have great uncertainty at the time of purchase and to improve the unit margin of the products sold, flexibility must be offered in the cancellation conditions to increase the probability of successful sales, even at higher prices.
In difficult times, such as the current scenario generated by covid-19, the companies that win will be those that provide greater peace of mind to their customers, even if they sell their products at higher prices.
Arguing that the unusual growth in sugar imports is harming local production, the Alvarado administration decided to raise the tariff on products entering Costa Rica from 45% to 79% for a three-year period.
The Ministry of Economy, Industry and Commerce (MEIC) concluded the investigation requested by the Agricultural Industrial League of Sugar Cane (LAICA) and 4 mills, on the safeguard measure against imports of solid state, granulated sugar, known as white sugar, used for domestic and industrial consumption, justifying a deterioration in the main economic indicators of the National Production Branch (RPN), details an official statement dated June 15.
It is estimated that the increase in online sales and the greater trend towards telecommuting will result in a lower demand for commercial premises and offices, exerting downward pressure on the price level of rents in the long term.
The quarantines decreed in the Central American countries because of the covid-19 outbreak, have caused a transformation in the operations of the companies, in the ways of working and in the models of business and sales.
In the current complicated context, companies must reconsider their strategies so as not to fall into the error of making aggressive discounts, since they could affect the positioning of their products in the medium and long term.
Ariel Baños, a specialist in pricemanagement and founder of Fijaciondeprecios.com, explains some of the important conditions that must be considered when deciding to make discounts in an environment of high uncertainty such as that which has generated the current crisis of covid-19.
Price per gallon of regular gasoline: Costa Rica $3.87, Nicaragua $3.28, Honduras $3.27, Guatemala $2.93, El Salvador $2.54 and Panama, $2.81
From the Ministry of Economy report of El Salvador:
The current reference prices present significant declines for gasoline and diesel, these declines respond directly to the events of the break of the pact between OPEC, led by Saudi Arabia, and the countries that had made an alliance with the organization, represented by Russia.
The authorities plan to regulate the prices of disinfectant soaps in tablet or liquid form, disinfectant sprays, liquid alcohol, alcohol gels and disinfectant towels.
According to official statistics, up to March 16, 41 cases of people infected with the coronavirus had been reported, and another 615 patients who were examined were found to be negative.
In Costa Rica, the price indexes of buildings and social housing registered in the second month of the year, year-on-year variations of -0.90% and -0.89%, respectively.
From the report of the National Institute of Statistics and Census:
Price per gallon of regular gasoline: Costa Rica $3.82, Nicaragua $3.61, Honduras $3.39, Guatemala $2.99, El Salvador $2.98 and Panama $2.81.
From the Ministry of Economy of El Salvador report:
The current reference prices for gasoline and diesel maintain a mixed trend (ups and downs), these variations are because of the continuous fall in the reserves of these products.
In the second month of the year the CPI registered a 1.79% year-on-year variation, an inflationary rhythm that exceeds the 1.58% reported in January.
Of the 315 goods and services that make up the consumption basket, 50% increased in price, 41% decreased in price and 9% presented no variation, informed the National Institute of Statistics and Census.
In the second month of this year, the FAO food price index rose by 8 percent compared to the same month in 2019, explained by rising prices of meat, dairy products, vegetable oils and sugar.
From FAO's monthly report:
-The FAO Food Price Index* (FFPI) averaged 180.5 points in February 2020, down 1.9 points (1.0 percent) from January but still 13.5 points (8.1 percent) higher than in February 2019. The decline marked the first month-on-month drop in the value of the FFPI following four months of successive increases. It was driven by a sharp fall in the export prices of vegetable oils and, to a lesser extent, meat and grains, more than offsetting a continued rise in dairy and sugar prices.
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