By Bob Meyer

Are you looking for real alternatives to the standard “price-focused” marketing strategy?

How many times have you heard someone exclaim that they’ll overcome a competitor by starving them out”

There’s a real danger in this “price-focused” type of thinking. And it’s not going to change, because there are two powerful forces at work behind the sharp price cuts that have been accelerating in the marketplace since 1976.

The first is a proliferation of products and services. More than 15,000 new products enter the market each year, although the majority of them fail.

At the same time, a process of “disintermediation”* is cutting out the middleman in an ever growing number of categories. So we see more and more companies willing to sell almost anything they can buy for cost at a virtual give-away margin.

(Disintermediation is a growing threat from brand-name manufacturers who are selling direct from Websites. They’re circumventing retail middlemen and catalogs— everyone in between the manufacturer and the end-user is an endangered special.)

The solutions to this all-too-familiar malady is to redefine the contest. You must begin to sell value, not price. Successful tactics would include micro-marketing and bundling, growing your own customers and establishing strategic alliances with vendors.

A key to competing is not necessarily changing what you sell, but changing how you sell it. You can offset higher prices by stressing value.

Cross-selling is another strategy that’s not used frequently. And offering conditions that others don’t, like a barter purchase option, is always guaranteed to increase sales.

Establishing A Niche With A Barter Twist

Look for ways to create a “niche” —that focused, specialized strategy aimed at a target market that has significantly different needs from the broader market.

For example, one savvy clothing store near a state university created such a niche when they enabled student customers to buy the latest fashions on a limited budget. And knowing this age group also wanted to keep up with the latest music, the clothier added a line of used compact disks.

Then, to establish a music inventory, without cutting into capital needed to buy apparel, the store owner bartered with his customers—taking customers’ used CDs as partial payment for clothing purchases.

Bottomline: He captured the college market and in a year the clothier built up an inventory of over 5,000 disks which were turned to cash when he sold them!

This entry was posted on Tuesday, March 20th, 2007 at 7:34 am and is filed under Entrepreneurs & Small Business, Marketing, Purchasing & Financing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.