Health Marketing Network Product » Product Pricing As A Marketing Strategy

One of my clients recently got pressured by customers to drop their prices because a competitor had done so. The first thing we asked for was proof that the customer had been offered the price. (Without proof, a claim such as this is hearsay, and you never put the profitability of your business on the line based on hearsay.) The customer showed us a written quote that, sure enough, offered comparable product at a lower price. So it was time to go "undercover" and see whether this was really a problem before my client reacted to the pricing pressure.

So the client and I set off to go mystery shopping. A drive by the competitors showroom 6 times during the following 48 hours showed the place was deserted - other than the staff, there was no-one there. There were no customers, no activity by the loading bays, no trucks rushing in to unload their wares. All was very quiet. Too quiet.So we phoned up and asked about the product, and it turned out the product was a discontinued line, once the existing stock had run out, the competitor was exiting the product line. (It also turned out the competitor was exiting the industry because of poor sales so was selling off everything at ridiculously low prices.)

Thankfully, all of this was discovered before we reacted and shifted on price.

So the moral of the story is this: Before you leap off the pricing precipice, check it is a jump you need to make first. Don your cloak of mystery and hit the streets. You might be surprised what you uncover.

Fiona Mackenzie is the founder of Undercover Strategist, a unique Australian strategic agency which has been set up to help small and medium-sized businesses to compete. Visit http://www.undercoverstrategist.com for more information and to check out the free handy tips and hints.

Source: www.articlealley.com