Saturday, April 11, 2009

Pricing: How low can you really go?

Tempted to cut prices? You're not alone. With slumping sales, many businesses have been quick to offer discounts.

"Cutting prices is by far the easiest marketing technique you can use," says Frank Luby, a partner in Simon-Kucher & Partners, a pricing and marketing consultancy. But price cuts raise some tough questions: Will deep discounts cheapen your brand? Once you cut prices, can you raise them again? How do you deal with narrower margins? Says Luby: "I try to get my clients to think about where they want to be as a brand when things turn around."

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