These days, thanks to the economic recession, it can be tough to continually think of marketing tactics to maintain your market share and avoid losing sales. There is the temptation to slash prices or even contemplate the action in order to compete with others in the same niche as you. While cutting prices may seem to be a simple thing to do, particularly in the short term, it does not always make sense to do so because it could become a habit. What if the recession stretches further than you thought? You cannot keep cutting prices because you could soon be selling at a loss rather than a profit.
Offering the Best Value for the Price
Having a strong, recognisable brand is important if you want to maintain your pricing strategy as high as possible without losing customers to the competition. How you define the value of what you offer is important when communicating with your customers. The stronger the communication you have with them, the more control you can exercise over your pricing strategy. Of course, you should have a few marketing tactics available to you so that any issues a customer might have will not be about price.
One smart move to try is bundling some of your products together which will accomplish several things. First, bundling effectively creates the illusion that you have broadened your product base. And second, bundling offers you a way to establish a broad spectrum of low to medium to high value offerings, so you can create a pricing strategy accordingly, without a straight price cut, thus maintain your profitability.
Long Range Planning
Lowering your pricing in order to make more sales and stay competitive in the market may work in the immediate short term, but it will not do much for the long term. However, you can alleviate cutting tactics and the effect on your profits by controlling operating costs in your company and look for ways to eliminate any redundancies and inefficiencies.
Streamlining your operations to reduce costs and increase efficiency makes good business sense anyway. Unfortunately, when business is good, you don't always look for ways to streamline. Rather, it takes a recession and reduction in sales to prompt action.
To maintain your competitive edge, even in a recession, look for ways to offer something innovative or unique to your customers. Can you easily change the packaging for some of your products to create a new look to attract attention? Can you offer any sales incentives or coupons for future purchases? Perhaps partnering with a complementary business (one that does not necessarily directly compete with you) can drum up new business.
Marketing new products during the recession can be a good move but don't expect an overnight boost in business. The same principle applies when cutting prices. If you do this too often, just to stay in business, then that is what customers will expect once the economy improves. Instead, try the product bundling or offer sales incentives so that you can present the illusion of offering a deal without negatively impacting your business financial bottom line.