Price, quality & service enough?

[tourismalgarve]

Hello,

I am looking at starting up a business and im wondering whether or not price and service is enough of a USP to compete with.

In the market im looking at you have two types of products offered, one set of products is offered by alot of companies they all look the same pretty much and the businesses mainly compete on price rather than anything else.

The other companies offer the same type of products however they compete on quality by offering custom designs that isn't available from the companies that compete solely on price. Infact these companies that compete on quality dont even bother to list their prices because they charge so much.

I am looking at opening a business that is somewhere in the middle of the two types of companies listed above, one that is able to offer customisation of the products at a price that is almost equal to that of the standard ranges.

Now ive read several times that you shouldnt just compete on price and im pretty sure this also applies for service.

Now i know i havent given you specific details on what the products are, but from the information i have given to you above would you assume that by offering service and quality at a lower price would it be worth it?

 

[DavidT]

Firstly, I wouldn't consider any USP there... and not always necessary anyway. Of course something unique may help but it isn't always important to the success of a business.

I suppose it's about competing more on value as a whole than simply price, and as you say competing solely on price is not often recommended (though sometimes it may be the only real way).

From what you say, I'd be looking at the value as a whole - rather than offering the top end at low end prices, it might be better to look at somewhere in the middle. Sometimes people will see low prices as meaning a lower quality product or service, and this is not what you will be wanting.

Of course, if you can offer more for less it is worth it.

Without knowing your financial side, you could also be setting up for failure if those existing in the market are pricing themselves that much differently. You will certainly have to consider all of your costs - fixed/variable, direct/overheads... and get some conservative sales figures and prepare some sort of break even analysis. This will start to give you an idea of how your pricing should at least be.

David Toohey
The Accountants Circle
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[Project man]

I have believed for a long time that then middle market is the toughest. High value and service or budget no thrills for me. It seems that most providers try the middle road and that is where the competition is the greatest. Be honest, dont over promise, be transparent. That leaves no room for not delivering. It is then about volume and profit margains.

 

[serendipitybusiness]

I think it is a good move stating your prices, especially when advertising on the web. I like to compare and find it to lengthy and time consuming contacting different companies to get a quote. For me this just creates unnecessary work I need to get the job done as quickly as possible and find the right guy so then I can get onto the next task. Customer service is definitely the key as it is 70% (I read somewhere) more difficult to get new customers than to retain and develop new business with existing ones. Plus I feel a personal sense of satisfaction knowing my customers are happy even if it costs me more in the short term.

 

[C.J.Couriers Professional]

I can give you an example of company that can provide excellent service with great prices and can be competitive on market of PC sales.
I was looking for a new PC for business purpose, one laptop wasn't enough. I didn't need anything special, just new and reliable system to help me run the company. I found one seller on e-bay, their shop was just couple of miles from my place so I went there. The couldn't help me as they were sending their PC's "from their warehouse" so I couldn't just walk in and buy one. I wanted to avoid PC World as I do not love them, so I decided to choose another local supplier, Aria Pc.
I walked in, there was a line of 12 PC's with their web site order form, I have chosen PC I liked (well under GBP200, an LCD and XP). I saved my order, walked to the counter and paid for it and in 10 minutes I walked out with my new PC and I still saved at least GBP200.

My point is, that even on such competitive market like PC sales you can do it better that other. What's the secret factor? Simple - quality and price. I know, you can offer either low price or high service quality, but at least try to offer similar pricing but no matter what kind of business are you involved in, you can always improve customer service. There are a lot of companies that claim that they care about their customer, but they just don't.
/Waiting for windscreen replacement from RAC for third month, they came, realised that they took wrong one, promised a call and... well... waiting for a third month
Anyway - good luck with your business. [FONT=Times New Roman, serif]
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