Most of us have a natural tendency to settle for cheaper alternatives when we look for a product in the market. From assignment help to furniture, the list is endless. In contrast, another affluent section believes that cheap products don’t guarantee quality and discards them straightway. But what do low prices mean for the economy, and what are the positives and negatives of using this strategy? Read along to know –
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Pros:
· Increased sales volume
This is the primary thought that believes marketers to set lower price tags. This is a tried and tested strategy where people always buy a product more if it costs lower than any rival brands. Some companies set lower rates for the initial period to skyrocket the business during the first few months before settling down for an increased rate.
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· Faster TAT
Faster turnaround time means lesser production costs for a company. If the existing stock gets cleared faster, they need to spend less on stocking them in a warehouse or on workers to look after them. This is even more beneficial for resellers since it opens the door for drop shipping.
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· Reach Wider Audience
Lower price tags also help a product reach a much wider audience. The people who previously left you because of low prices else also come back. Lower prices spikes word-of-mouth promotion which marketers believe to be the best and most effective form of marketing.
Cons:
· Credibility
Many people feel that if the price is too low, then the company is compromising on their quality. Moreover, with the internet at the grasp of every buyer, they can compare your product with a global market. For example, if you advertise about providing the cheapest book review writing help online, customers can compare with hundreds of other websites around the world and find someone cheaper. It also hits the credibility of the brand.
· Discounts
Offering low prices throughout the year prohibits you from benefiting from the inflated market during holidays and occasions like the Black Friday sale.
· Perception of Quality
Offering a low price for a product or a precalculus homework help around the year creates a perception of its price. In the future, if the price of raw materials increases or inflation happens, the brand will suffer the most. People feel they are getting lesser value for money and stop buying.
These are some of the pros and cons of using a low-price strategy in the economy.
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