How to Raise Prices without Losing Customers
As we know all the companies desire to make their customers get addicted to their products, thus they can control the price easily and even increasing the price might not give a result of losing the customers. A company which can create ways to collect information about its customers and become successful in managing client relations might gather higher power in the market and can become more competitive.
In the old times, there were not high competition in the markets, thus even making simple differentiation of products or a simple after sale service could make a company very favorable among the customers. However, nowadays every company has the knowledge, human resources and technology any product. Even we observe that companies can copy other companies’ products easily or they can develop very close substitutes to the rival products. Although differentiating the products by the R&D works is still a very powerful weapon for the companies in the market competition, it may not be enough for the companies. Thus they need more tools supporting the power of the company in the market.
One of the most important ways to measure the power of a company in the market is to observe how much a company can control the price of its products. If a company can increase the prices and it still can sell its products and does not lose customers, then we can say that this company has an essential power in the market over the customers while there are many other very close substitutes.
Recently, companies have figured it out that being close to the customers making a difference. Thus many companies are investing more in demand analysis and public relations to understand their customer situation in their market and their needs so they can supply what they need and develop better sale strategies such as specific pricing strategies. In another word, they can satisfy their customers’ needs with higher quality goods and services. For example a company who knows its customers’ situation and their needs, a specific pricing strategy which provides better purchasing conditions for the customers can make a large difference. Thus the customers, even though there are many other close substitutes, will prefer this company because the company can customize its supply according to its needs.
Consequently, to be successful in the market and control the prices easily, a company needs to improve relations with its customers and needs to understand them, thus it can make the customers feel more addicted to its products. It needs a very complicated process to manage, however in a market with a lot of rivals which has the same technology, the same knowledge and the same quality human resources, and then to be different requires more than simple production processes. The companies should be able to invent new ways of marketing.
Chandon, P. (2003). Innovative marketing strategies after patent expiry: The case of GSK’s antibiotic Clamoxyl in France. International Journal of Medical Marketing, Vol.4, No.1, pp.65-73.