Getting the pricing of the commodity right is a big problem for many new business owners. A lot of the companies first decide the price and then workout the rest. Practically, it is never the owner or the consultant who decides the price. The market decides the price. And normally, this decision is directly related to the business objective.
Vijay Sokhi, Founder Director, Sharp Consulting and Implementing Company says, that if price is an important indicator of business then any brand that is priced the lowest should be the undisputed leader. But, in reality, this is never the case.
While consulting with one of their clients, SCICO rolled out a price that was 15 percent higher than the market leader. Obviously, it took a lot of convincing and back and forth from their client, but in the end, it was done. If they had gone with the logic that a new product launched at a price point higher than the market leader should not sell at all. The business should have failed. But, in reality, the product is currently thriving and is getting a lot of acceptance from the consumer.
When one provides the consumer with a product that has a premium packing, with a superior product quality and a solution that the consumer are not getting from the current brand, they will make the switch irrespective of the price.
Building sales is much easier than building a brand. Running the brand of a company that has already established its name in the market is remarkably different from establishing a new company. Sharp Consulting and Implementing Company (SCICO) believes that in the long run it is not the sales that will keep the company alive but the brand. There are many companies that sell products but when one is asked to name a few, they always take the name of ‘that big brand’.
In the lure of getting accelerated growth, some of SCICO’s clients wanted them to give heavy discounts. Sokhi strongly recommends otherwise. Slashed pricing should never be one’s startegy. As a consultant who implements, Sokhi has always believed in protecting the clients’ margins. If any company is able to protect their margin, then at a later stage, when the business starts growing exponentially, profit will never be a concern and cash will be available for mass promotion. But when a start-up thinks that by giving extra discounts they can get extra sales- it might happen in the short-term but the long term implication of such a strategy is very detrimental. This would put shackles to their budget and they will have to limit the marketing spend.
SCICO has crafted, to perfection, two of its tools – MapTapAdapt and Sharp’s Pentagon. These are specifically made for companies that are starting their own business or companies that are struggling to get acceptance in the market. SCICO can act as a catalyst to your business and come with solution that can be implemented. After all, implementation is the key and one of the most important pillars of Sharp consulting and implementing company.