Big Marketing Mistake No.5: Compete on price

Competing on price is a slippery slope to the sweatshop

Conventional wisdom has it that if you’re entering a competitive marketplace with an offering, you’re going to need to match or beat your competitors on price.  Too many small businesses seriously undervalue their offerings from the start – and when the going gets tough, make the mistake of lowering prices to gain more business.

You need to remember that price is only one part of the picture.  Instead of trying to undercut the competition, perhaps a better strategy would be beat them on features and service.

What makes a price ‘right’ is a combination of factors: the quality of the offering; the added value it brings; the strength of its features; the back-up and after sales support; the quality of the materials and the precision of the construction to name but a few.

If you can make your offering win out on quality, features and downright desirability (think iPhone!) then the ‘right price’ could quite easily be higher than your competitors’.

Competing on price is a destructive process where the logical outcome is outsourced products and services and ultimately sweat-shop exploitation.  Competing on quality, features and benefits on the other hand, makes for a much healthier business environment for all.