The pros and cons of a price war are as follows:
The customer could get varieties among the product at a low cost.
Increase the potential customers and also tempt fresh customers.
Marketers provide more than the actual effect to retain the customers.
Marketers get profit at the starting stage of a price war.
This is the charming way to proceed with the business most favorably.
Here the time management is very important because it is time-taking process.
Expensive by nature.
The loss is very much familiar if the research strategy is unsuccessful.
Higher chances of losing customers.
The profit margin is low for a shorter period.
The effort is a very distant future.
Causes and Effect of price war
Here the market share increases because of price war, alternatively the revenue generated is high. The strategy in a price war is for a shorter period, the cost will get into effect as of price. The products are placed at a low price; this strategy is utilized by startups and they penetrate the business positively, which impacts on existing business players, and creates healthy competition. A business that is king in the market rules the market. Therefore, the company drastically changes its price range which may decrease or increase. It will not impact huge loss in their business instead the smaller business are affected negatively. Therefore, from this strategy, the consumer does not go for other options to choose the product. Price war: 4 strategies Following are the four price war strategies:
Research: Why the price war start, in the first place, should be to understood, they must do some research about the other competitor that lowered their price according to their convenience. This may be because they are just trying to raise cash or get rid of inventory or for any other reason. This is why they should investigate the current market scenario and investigate all possibilities before making any moves.
Add value includes gifts which they can give to the customer along with the purchase.
Marketers give special deals when the customer purchases an additional amount.
Advertise your offerings: The companyâ€™s offerings during the price war benefit customers maximum because it is a loss for the company. The company uses some introductory phase strategies like buy one get one free deal, reduced-rate bundle or package, and double the points if you have a loyalty program. The advertising campaign indirectly stimulates the customers to ask as many questions as possible to the marketer about the product, brand, cost, offers so related to the published advertisement. Build up your brandâ€™s reputation: The societyâ€™s word of mouth is a great source for marketing anything because it positively reflects the brand. Business experts must create effective guidelines about conflict management, acknowledge the response, keep an eye on the brand regularly, provide a good consumer experience, collect responses from the consumers, and alter improvements.
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