Before we begin the discussion, the first and foremost question that we would like to discuss is about the pricing of the product? As an intelligent customer ‘Would you like to buy an expensive product or a budgeted one if they reflect same quality and texture but is different in terms of brand? As per the research, it has been observed that 95% of people would like to prefer the budgeted product irrespective of the brand.
Due to rapid developments in the e-commerce and retail markets, the diversity in the market and the products offered has gone to new level. There are a lot of product variants available, with good quality texture offering a good level of satisfaction to the consumers. Therefore the mentality and the thought process of the consumers have diverted from the expensive and branded products (as far as rich and super rich customers are excluded) to the less expensive but good quality products.
For e.g. if we take into consideration the case of mobile phones, Bikky Khosla– chairman of the Assocham National Council on e-Commerce & chief executive of B2B marketplace Trade India clearly says that with the availability of low-cost smart phones, the e-commerce opportunity will increase manifold as it gives the people to select from a wide variety of options to explore.
A smart pricing strategy i.e. (low cost pricing) is a must while selling the products, services and subscriptions for succeeding in a competitive marketplace. People are increasingly looking for low cost products in different segments such as electronics, household, garments or services due to presence of wider choices products.
In order to fuel the thought process of the customers, companies and firms are adopting the low cost strategy apart from (differentiation strategy and focus strategy) that are being used to implement low pricing to motivate demand and gain market share.
A low-price strategy involves pricing the product to be the lowest in the market and then targeting those consumers, who are looking for the cheapest option in that category. For e.g. the e-commerce websites such as Flipkart, snapdeal and amazon are focusing on low but good quality products to increase their customer base and they have succeeded as well in doing so.
Hence the most profitable customers for the companies are the ones who are their long-term customers. And for maintaining a long term relationship with the customers, low pricing of the product is a good tactic to keep them attached to your company.
We hope that as our valued reader, you would have got the basic idea of pitching the price of your product right. We would be providing you with valuable insights on these topics on a regular basis to keep you abreast to remain competitive in the market. Enjoy reading the content.