How to beat competitors without lowering prices

Price dumping is often the first thing that comes to managers' minds when developing a competitive strategy. However, in order to increase its own market share, it is not necessary to reduce business profitability and prices, there are other effective measures.

If sales have started to fall, or the company is significantly behind its competitors in this indicator, it's time to find out the reasons and develop an effective strategy for positioning in the market.

To win the competition, the most important thing is to understand the needs of your customers

The first thing to do is to understand the key factors that influence the choice of goods by consumers. So, according to a study by The Forum Group, the high price of a product makes buyers refuse to buy in only 15% of cases. The main reasons lie in the service offer - poor service (45%) and insufficient attention paid by managers to the client (20%). That is why on the market you can often find companies offering products at a reasonable price, while the sales of one of them are an order of magnitude higher than that of a competitor.

Thus, lower prices do not guarantee sales growth. There are also situations when a company sells a similar product even more expensive (for example, hair shampoo or toothpaste) and, moreover, is more effective than its competitors. This is due to the fact that she competently was able to identify the needs of customers and correctly positions her product on the market.

Based on the analysis of consumers, draw conclusions how you can increase the value of goods for buyers. Report to the consumer what additional benefits he will receive when buying goods. For example, by pointing to a special unique product functionality.

Define your key competitive advantage and formulate it briefly in the framework of USP (unique selling proposition). That it should be the leitmotif of your marketing policy.

It is also important to understand what service factors are relevant to your customers. For example, you can sell cars more expensive, but at the same time offer a free set of additional options that competitors do not have. Or extend the warranty period from one year to two.

Rate your product’s competitive position

Assessing the competitiveness of a product is also based on a study of customers.

The tasks of analyzing the competitiveness of goods are not only in assessing, but also in forecasting the competitiveness of products, as well as in studying the factors that influence it.

In order for a product to meet the needs of customers, it must meet certain parameters:

- technical (properties of the product, its scope and purpose);

- ergonomic and aesthetic;

- regulatory (compliance of goods with applicable norms and standards);

- economic (level of prices for goods, its after-sales service).

Based on the analysis of competitiveness, it is necessary to develop measures to ensure the necessary level of competitiveness of products. For example, change the packaging of the product or improve its usability.