When choosing a strategy for your company, understand that options 6, 7, and 8 are not viable strategies on truly competitive markets. If your price exceeds perceived value, you will face stiff competition from those companies that can offer customers higher-quality goods or services at more favorable prices. That's why it's so important to balance your value and price.
When choosing a competitive strategy, several questions should be answered.If you plan to compete on price:
• Can you be the price leader?
• Does your company's economics allow you to maintain the position of the cost leader?
• Do you have the resources to keep costs low and maintain a high margin in the long term?
• Can you balance a low price with the perception of the value received for that money?
• Does your pricing advantage extend to one or several market segments? Can these segments keep your business afloat, considering the volumes and margin that the position of the price leader gives?If you plan to compete on perceived value:
• Do you have a clearly defined target market?
• Do you understand what your target audience really values?
• Do you know the value of your competitors' products and how this value is perceived by your target audience?
• Do your products possess meaningful differentiation that other companies cannot easily copy and that you can use to distinguish yourself from competitors?
• Do you have alternative methods and resources for differentiation from competitors? If they can offer the market a similar value, will your competitive advantage in this area be lost?
When choosing a pricing strategy, align it with your corporate strategy and competencies, as well as with the resources you have and the environment in which you operate. And once chosen, constantly adjust your strategy according to changing market expectations. Because there will always be competitors on the market trying to offer higher perceived value at a lower price.
The Priceva service helps companies navigate clearly on one of the axes of the Bowman's clock model, namely price. Automated price monitoring
in real-time provides a complete understanding of the prices of the competitive environment and your company's position relative to any of the competitors.