Friday, June 21, 2013

Better Before Cheaper - Competing on non-price value, not price

When it comes to how you differentiate yourself from the competition, seek out a position based on non-price value. Do not compete on price. Price-based competition can work, but only rarely does it drive exceptional performance.

When the recession hit in 2008, Abercrombie & Fitch (one of the exceptional companies) was criticized for not cutting their prices as most other retailers did. And although their profitability suffered significantly in the short-term and full recovery remains an uphill climb, they are not struggling to cure their customers of a "discount addiction." "Those competitors that coped with the recession with price discounts are finding it difficult to increase their prices, having taught their customer that their T-shirts do not have to cost $30 after all."

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You can help me with correcting any information or suggesting some thing to make this article more informative :-)