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Race to the Bottom
THE PRICE OF YOUR PRODUCTS or services can be an excellent way to position your brand. Your price helps dictate how prospects perceive the value you offer through your product or service. Being the lowest priced option will give people one feeling about your brand; a higher price will give them another. What customers expect from you is often determined by price. The old saying “You get what you pay for” is a cliché for a reason. People truly believe they get what they pay for. Is your brand a premium, higher option or is it a type of commodity, lower option?
Being the highest price in the marketplace may not be the positioning you want. You don't have to have an exclusive or luxury brand to have success. That being said, being the lowest price is a position I would never recommend. Ever. Low pricing is a race to the bottom of the marketplace.
One of the problems with trying to be the cheapest price is that it is far too easy for someone to come along and price their product or service lower than yours. If you think having the lowest price in your industry is a good strategy, remember that someone is always willing to go broke faster than you. Someone will go cheaper than you, even if it puts them out of business.
Low price positioning means your business might as well be standing on quicksand. There is no loyalty for brands positioned on the low end of price. The customer will go to who is offering the lowest price. At what point do you stop lowering your ...
