Is price important?

[Ashley_Price]

When you are looking for a service or product is price a major factor, or does it come after other things like "company reputation", "quality of service/product", "size of firm", "locality" etc.

I often hear/read people saying something like "We charge the cheapest rates!" or "You won't find anyone cheaper!" or even "We'll match anyone else's price!", but do these work for you?

For me it really depends. If it's a product I am buying that will be exactly the same anywhere then it depends on what I need to do to get the cheapest. Okay, getting say a computer game off the internet is likely to be cheaper, but not always and you have to wait up to several days before you get it. If you buy it in the shop it might be a fiver more but you've got it now and if there's anything wrong with it you can simply take it back and get an exchange immediately!

But if it's a service then price is rarely the deciding factor.

 

[sm1]

Usually price is an important thing for me. If for a service, then I have a rough guide and then look around at places close to that guide price and choose other factors. If it's for our business cost is a major part, while we are a new business.

HTH

 

[tax-sorted]

Price is always an issue but be careful. When people buy the cheapest they will always be looking for a cheaper option. So unless you can stay the cheapest you will LOSE!

When I started in business I made the mistake of being cheap and regretted it as I became a "busy fool".

Now I charge a fair price for a fair days work. All my prices are fixed and guaranteed.
Hope this helps

 

[sm1]

If it's for a service, people will sometimes pay a bit more if they know they will receive higher quality than elsewhere.

 

Whilst we need to keep our prices competitive, we cannot be the cheapest and so offer more quality and better service, which our customers seem to be happy with.

Cheap in some sectors can mean poor quality, and that in the IT sector tends to mean more support, so not really worth it in my eyes.

There are people who don't compare anything other than price, and we just have to accept that they will go elsewhere - but they do keep on turning up on forums or back at our door looking support when their cheaper option lets them down

 

[self-sale]

Hi,

What I look for is value. If the product/service is at a price level that justifies/substantiates the cost and I see the value, then there's a good chance I'll buy it.

On your computer game example, if somebody puts a greater value on getting the game there and then rather than saving a few pounds and waiting for a few days, then they will buy it there and then.

I hope this helps.

When you are looking for a service or product is price a major factor, or does it come after other things like "company reputation", "quality of service/product", "size of firm", "locality" etc.

I often hear/read people saying something like "We charge the cheapest rates!" or "You won't find anyone cheaper!" or even "We'll match anyone else's price!", but do these work for you?

For me it really depends. If it's a product I am buying that will be exactly the same anywhere then it depends on what I need to do to get the cheapest. Okay, getting say a computer game off the internet is likely to be cheaper, but not always and you have to wait up to several days before you get it. If you buy it in the shop it might be a fiver more but you've got it now and if there's anything wrong with it you can simply take it back and get an exchange immediately!

But if it's a service then price is rarely the deciding factor.

 

[Ashley_Price]

I should mention I'm not doing this for any sort of market research, I'm just interested in people's thoughts.

 

[sm1]

I should mention I'm not doing this for any sort of market research, I'm just interested in people's thoughts.

Good on you

 

[Gillie]

Price does come into the equation as cheap often means useless and expensive usually means over priced!

Its striking the balance and offering a fair price and perhaps being able to offer added goods for free, thats what gets you noticed!

 

[leeg]

I would say that price is always an issue unless your dealing with footballers or lottery winners!

If your looking for a particular product ie TV and you know which model you want then generally the place selling that make and model the cheapest will usually sell the most, however in a service based business choosing the cheapest option isn't always best and this is where building a reputation for reliabilty and quality of service pays off.

 

[ChrisR]

All this I think bowls down to the three generic Strategies identified by M. PORTER to obtain competitive advantage:

- Differentiation: People buy your stuff because it's different enough for them to want yours and not someone else's. Your product can be cheaper or more expensive, but if your strategy is differentiation, then they must buy the product because it is different

- Cost Domination: People buy your stuff because it's cheaper than competitors' stuff perceived as identical

- Focalisation: Either of the above but with a tightening on a specific market segment

Whatever the choice, it is hard to maintain competitive advantage, you either strive at maintaining low costs, or strive at maintaining high R&D to differentiate, or strive at maintaining specific marketing segmentation.

If you have a differentiation strategy, and people start comparing prices, it's a sign that your strategy isn't working too good… If you have a price dominiation strategy, and you start finding yourself arguing why your product is better, it's a bad sign as well…

 

[Stephen Berry]

If you have a differentiator (termed 'competitive differential' in the Strategies of the elephant chapter) - whatever the differeniator is, you have the potential to charge a premium - people are buying more than a product.
If, however, you sell a commodity indistinguishable from competitors, your options are either to generate a differentiator (i.e. something which makes your offering different) or to be the cheapest. I do not see a third option.
In the chapter I quote lots of examples - from duck and wild cherry pate to coffee republic, huggies nappies to Mr Muscle, Mercedes, Marks & Spencer, Tiger Woods, Nestle etc etc etc

 

[Stephen Berry]

If you have a differentiation strategy, and people start comparing prices, it's a sign that your strategy isn't working too good… If you have a price dominiation strategy, and you start finding yourself arguing why your product is better, it's a bad sign as well…

I think we were posting at the same time Chris.
What you say here is a very good point.

 

[ChrisR]

Yeah.. it looks like it ! I think we can share ownership of the ideas (well, limited to the forum that is) !

 

[Cornish Steve]

The 'right price' is always important. It may be the highest or the lowest or somewhere in between, but it's imperative that, for your product or service, it's right.

 

[Deleted member 3454]

My search for a supplier always starts within our church and other local churches, followed by recommendations, so if I'm looking for an electrician or plumber church is the first place I will look. When there is no-one in the business I am looking for in church I will look for the best deal which will include price, added extras included in the price, recommendations from my friends and family, how helpful any sales staff have been.

As others have said it can be a false economy to go on price alone.

 

[SenditOver]

well just today, ive started an offer on my website slashing my prices withing the area of sandwell west midlands.

i just want to measure the response vs regular day-to-day activities

 

[ChrisR]

Hi,

For info, your "about us" button seems faulty... It doesn't send anywhere. It looks like it links to the current page, whatever it is.

 

[Ashley_Price]

well just today, ive started an offer on my website slashing my prices withing the area of sandwell west midlands.

i just want to measure the response vs regular day-to-day activities

As has been said above as your "About us" appears to be the same as your home page, you might as well get rid of the "About us" link.

Also take away any mention that you are a small firm. When I read that I couldn't then believe that you had the capability "of delivering over 50k leaflets for you each month." I am not saying you don't have that capability, I am saying it is hard to believe once a potential customer reads that you are small.