Low cost and low perceived value This strategic stance involves offering goods or services with minimal value at a low price. Businesses typically compete solely on pricing and have low-profit margins. While they can increase their market share, they require assistance to sustain their operations over the long term. These businesses are commonly known as economy rivals, and they cultivate strong brand loyalty by targeting price-conscious consumers.
Low price This stance involves offering goods or services at the same or lower price than competitors. Businesses that adopt this model often focus on cost savings to provide customers with the same level of quality at a lower price. While they may increase their market share, their profit margins may not be as high. This approach is effective for businesses in highly competitive markets where price is a crucial factor in purchasing decisions.
Hybrid: low cost and differentiation This tactic entails supplying goods or services at a cheaper cost than rivals while maintaining some difference. These businesses often charge less for an essential commodity or service. After that, they charge an extra fee for premium features or services. Companies looking to gain market share and develop a strong brand identity and competitive advantage should use this technique.
Differentiation This tactic provides goods or services with unique qualities that set them apart from rivals. These businesses often charge a premium for their product because of the extra value they provide. It’s an approach that’s perfect for companies aiming to expand their market share while creating a distinct competitive edge.
Focused differentiation Offering highly specialised goods or services that appeal to a specific target market is part of this approach. Thanks to their sharp distinctiveness, such businesses typically charge a premium for goods or services. This tactic works well for companies that have discovered a particular market niche that they can better service than their rivals.
Risky high perceived value Offering goods or services at a very high cost yet with a high perceived value is part of this approach. Businesses that take this stance employ a positioning strategy that is high risk since the market may need to prepare to pay such high prices. This tactic works best for businesses with a solid name in the market, a devoted client base and the ability to charge more for their goods or services.
Monopoly pricing This approach involves setting the highest possible prices for goods or services in a market where the business has a monopoly. Companies that adopt this approach typically have a competitive edge due to barriers to entry or patent protection. They can set prices as high as the market will bear without losing their edge.
High cost low perceived value This tactic charges a lot for goods or services that give the consumer very little value. Due to consumers’ reluctance to pay high prices for goods or services that fall below their expectations, such businesses risk losing face in their business category.
