Your pricing strategy is undercut by a rival retailer. How do you regain your competitive edge?
When a competitor undercuts your prices, it's time to innovate and reposition. To navigate this challenge:
How might you adapt your strategy when facing aggressive competition?
Your pricing strategy is undercut by a rival retailer. How do you regain your competitive edge?
When a competitor undercuts your prices, it's time to innovate and reposition. To navigate this challenge:
How might you adapt your strategy when facing aggressive competition?
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Marketer should avoid adopting an undercutting cost strategy, as it often leads to short-term supply shortages and long-term price hikes. Additionally, in the long run, customers may suffer from price discrimination, which can occur if a monopoly forms after competitors exit the market. A more effective approach is to differentiate the value proposition and improve the customer experience to maintain the existing customer base and win back those who have churned. This strategy ensures sustained competitiveness without damaging market dynamics.
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Competing on price is a race to the bottom. Instead, focus on highlighting the value your product delivers (differentiator) by polling current consumers (or category consumers for broader insights).
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To regain your competitive edge after being undercut by a rival retailer, you must differentiate your offerings (e.g., superior quality or service) to justify your higher price. It's also helpful to reward loyal customers with rewards and exclusive deals so that they are more tolerant of (slightly) higher product prices - it's similar to why Costco members do much of their shopping at Costco even if individual product prices might be cheaper elsewhere.
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In the face of a rival undercutting prices, Brands can regain the edge by leaning into their legacy products, new product innovations and consistency in quality. If you were the first to set industry standards, then keep that quality of pioneering products unmatched. In product innovations, instead of just following trends, it is better to lead by anticipating future needs and delivering superior, high-performance products that offer lasting value. Your customers trust you for excellence, not just low prices!! And a brand can continue to build on that trust through commitment of quality and legacy.
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In the face of aggressive competition, adapting your strategy is key to maintaining your edge. Here are a few approaches: 1. **Enhance Value Propositions**: Differentiate by focusing on superior quality or exceptional service. Make sure your offerings stand out. 2. **Leverage Customer Loyalty**: Encourage repeat business by implementing rewards programs or offering exclusive deals to your loyal customers. 3. **Adjust Marketing Focus**: Highlight unique selling points that go beyond just price. Emphasize the added value your product or service provides.
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Differentiate Unique value-added services or products that truly differentiate from competitors; Customer experience by ensuring service excellence and loyalty programs; Use the power of digital marketing, optimize your SEO, create interesting and relevant content, and make that online presence strong; Optimize supply chain : A better negotiation with suppliers, higher savings; Partner Strategically: Partner with those businesses whose products or services can complement your own business; Have Promotions: Limited-time discounts or offers on your products; Focus on value: Help the customer understand why you offer that value. Monitor competition: You should know what strategy they are implementing.
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My only answer to price undercutting is to avoid it for long term sustainability in the market. Focus on your unique USP’s, tweak your marketing strategy with key target points. Highlight and boost on your customer satisfaction rate and value. Offer loyalty rewards instead of price cutting.
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Value creation is the only way to have competitive edge. Value creation through customer experience, authentic connect and innovation in products.
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personalized recommendations, or premium support. This approach builds a community around the brand, creating long-term value and engagement that a competitor’s price cut can’t easily disrupt.
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