Are Price Promotions a Blessing in Disguise or a Waiting Disaster for Business Owners?

Price promotions are for many business owners a blessing in disguise. On the other hand, it may turn out to be a disaster for your business after a while. After all, the value of using price promotions is that it may render a quick remedy when you cashflows and revenues are lagging behind.

However, if you rely too much on price promotions to get business, you may put your business in danger over the long-term. In fact, you may turn your loyal customers into greedy bargain hunters.

So, please view the video (above) for a richer experience of this discussion…

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Pricing Strategies for Small Businesses – Competitive Pricing

The competitive pricing strategy is by definition a strategy that considers what happens outside the perimeters of a business. It is more sophisticated than the Cost-Plus Pricing Strategy that was discussed in an earlier post.

Indeed, competitive pricing decisions involve significant market risks and managerial attention 1. So, if your business does not have the structure and culture to keep an eye on what is happening in the market for your product, you’ll probably have no sales or have lots of sales, but at a loss!

Let’s look a bit deeper at the practice of competitive pricing…

 

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