LOW COST THEORY:A STARTER FOR BUSINESS ENTRY
Competition in a business market can be compared to a two-way traffic along a highway where most of the vehicle's maneuvering in the road with one another. Some cars are in advance of others; some are at par and some at the farthest line. When the competition is too tight, a bumper-to-bumper movement is a common scenario. Like most cases, a driver wants to get ahead of the front car. In business environment, the underlying statement would be: How can you able to move on traffic like this when you are new in the market?
The first strategy an entry businessman will do to compete with big time businesses is to lower the price of his products, especially when your main product is the same variety of other businesses. However, this move does not guarantee that your good or everything will go smoothly. There are many things to consider before you launch your products in the market, below are the important points that I suggest, to wit:
A .) CHOOSE YOUR MARKET SEGMENT.
When we say, market segment, I mean the type of customers where your product be introduced because not all customers prefer lower prices but some market segment wants quality over price, and some want a little low to compare to the other product, but the quality is at par or great. Once you have selected your market segment and know that their preference is lower price then you’re initially good to proceed.
B .) INTRODUCTION OF PRODUCT
Marketing is very important if you’re new in the business because that is where your customer knows what you’re selling, it’s the benchmark, and it gives a sign if your product is accepted in the market. We have to remember that saying, “first impression last."
C .) LOWERING YOUR OTHER COST
Once you are already in the market, one of the major problems is maintaining your level or status quo. You need product innovation, if not, then at least improves the quality of it without changing the price. The best way to do this review the value chain and see where you can less your cost.
D .) GETTING TO KNOW YOUR ENEMY
Business is a risky game. You need an offense and defensive game plan and in order to be on the track of the game you have to know your opponent. Know the important information that makes your enemy tick because “Knowing your enemy is correcting your flaws."
In a business world where the market is too big, a careful planning and analysis are essential because in that market field your enemy is always in constant change, therefore, you need to be quick-witted and alert to survive. As a guide be more vigilant of your competitor's movement or progress. Don't be too confident and exercise wise decision.
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