The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

Entering into established market

Learn how to build wealth and win financial freedom the Fastlane way!

Say "NO" to mediocre living rife with jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence. Join more than 70,000 entrepreneurs who are making it happen.
Join for FREE Today
Get the books
Remove ads? Join Fastlane INSIDERS
(Registration removes this block)

Is it better to offer a low price or high price when entering a new market?


  • Total voters
    4

BusinessBen

Silver Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
May 29, 2014
360
504
24
Canada
Is it better to price your product lower when entering as a new company in a already established market? Or is it better to price your product accordingly and just provide a superior product? I would offer a superior product in both situations. However, is it better to offer a low price or high price when entering a new market?
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
3,197
12,745
World citizen
Is it better to price your product lower when entering as a new company in a already established market? Or is it better to price your product accordingly and just provide a superior product? I would offer a superior product in both situations. However, is it better to offer a low price or high price when entering a new market?
To a large extent it will depend on your sales and marketing skills.

If you are good at sales, you can forget about cost plus pricing or competitor minus pricing (price cutting) and charge what the market will bear. Competitors' prices will possibly give you some idea of the market value of your product type, but you must compare apples with apples.

Approach competitors as though you are a potential customer. How do they respond?

When planning on launching my importing franchise network in another country, I phoned my competitors, I visited them, I obtained samples from them, and was able to assess the true nature of the competition I was facing. Fortunately for me, I discovered that sales staff were largely ignorant about what they were selling, unable to answer even basic questions.

Their pricing was almost identical to one other's prices, and they all had a mean attitude that required them to charge for every little extra they could dream up. Even their advertising which at that time was predominately print Yellow Pages, was boring because instead of paying to have good copy prepared, they followed the free standard advice given by the totally inept YP representatives.

My franchisees entered the market well trained in product knowledge, confident that they were offering the best quality on the market, indoctrinated with the concept that the customer is always right, a willingness to give more than the customers expected, with "free" set up, and "free" delivery, and with prices way above what the competitors charged. They killed it, and in the first country where I set up franchises overseas our brand soon became #1. It still is, even though I sold out a few years back.

My view is that if you can only sell on price, you can't sell.

Walter
 

MJ DeMarco

I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
Summit Attendee
Speedway Pass
Jul 23, 2007
34,650
136,447
Utah
Is it better to price your product lower when entering as a new company in a already established market? Or is it better to price your product accordingly and just provide a superior product? I would offer a superior product in both situations. However, is it better to offer a low price or high price when entering a new market?

Start low to gain traction, good reviews, good word of mouth, etc.

Your objective should be to determine the existence of a productocracy. Once gravitons are found, your pricing can escalate and be in the high range.

The only exception to this would be a product using a luxury branding strategy.

You don't want to start out cheap, and then go expensive as it sends two different brand messages.
 

Walter Hay

Legendary Contributor
EPIC CONTRIBUTOR
Speedway Pass
Sep 13, 2014
3,197
12,745
World citizen
An extremely or even ridiculously high price can be a magnetic USP in the luxury market. If I may mix my metaphors, that red hot price can act like a flame to a moth.

Just having a superior product is not enough. The customer must perceive that product as superior, and unless quality is paramount for that customer there must be other incentives to buy from you.

Walter
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

BusinessBen

Silver Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
May 29, 2014
360
504
24
Canada
@Walter Hay @MJ DeMarco

Thank you both for your solid advice. I will take both perspectives into consideration. However, as my product is not a luxury product, I will probably price it lower to start then gradually raise it. Also, MJ, I have your new book, it's definitely a really good book. Thank you both again.
 
Last edited:

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Latest Posts

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Must Read Books...

Explore books recommended by MJ DeMarco and other members of the Fastlane entrepreneurial community.
Fastlane Bookstore
Top