Anand Srinivasan says, “Every business owner goes through a phase of uncertainty during the launch of their first business. One question that bothers almost all of us is how you should price your product or service. Depending on your industry, you are likely to have competitors who have been in business for decades. Why should any customer pick you over a business that has already built decades of trust? You may be tempted to compete on price instead. But then, given the globalized world we live in, you are very certain to encounter competitors who sell their products at prices that are already much lower than what you can possibly offer.

The answer to this question is quite obvious – you must look at offering a product or service of higher value at a more affordable price. In fact, a recent study that looked into the effects of the entry of a new chain into an established market found that the fresh competition brought about a 2 percent reduction in price and over 5 percent improvement in quality.

There are numerous ways a new business can make a successful market entry through this strategy. Here are a few ideas.

Sell A Solution, Not A Service

Service businesses like lawn mowing, landscaping or baby sitting are routinely regarded as commodities where the providers are easily replaceable. If you are in one of these ‘commodity’ service businesses, the way out is to package your offering in such a way that you are no longer just another service provider. For instance, lawn mowing is a commodity“.

How To Tackle Competition By Adding More Value To Your Business

Business.com

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