Author: Rafael Muñiz
27 pages
10 eur + iva
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Price war: who will raise them when it finishes the crisis?
The simplest solution before the fall of the consumption is to lower the prices of the products, but: is it perhaps the most suitable? According to the experts not. A reduction of this element without temporary limit, that is to say, in a permanent way, will do that the consumers always get accustomed to buying with discounts and then it will be difficult to convince them so that they pay more for the same products and services.
When a company initiates a price war it provokes a reaction in his competitors. This answer will depend on the grade of rationality of these, so that an emotional competition will choose to reduce the tariffs of his products, while the rational one will resort to a change in the strategy that encourages his extra cost. In the first assumption, the real problem will appear once the consumption has become stable, put that the company can have lost part of his prestige or the public has a negative answer before any attempt of raising again the prices.
The solution before the descent of the consumption consists in preparing a suitable pricing strategy. This skill, which consisting of the making of more profitable prices and of tariffs for the company to every product, is taking impulse in the last months and supposes the form most adapted to confront the crisis. The price is the most flexible element of the marketing, but it must always support a proportion with the production costs. According to Rafael Muñiz, in his book Marketing in the XXIst Century, “the prices of the whole line of products must decide simultaneously by means of a general model of optimization who considers not alone the prices elasticities, but also the elasticities crossed between each one”, being the crossed elasticity the percentage change of the sales of a product as a result of the percentage change of the price of other.
That's why, many marks have chosen for another type of answers like creating shops low cost to attract to this segment of the population who looks for offers, or to offer discounts only to the habitual clientele as fidelización. In case of Nestlé Spain, company that is employed at one of the sectors least affected by the crisis on having talked each other of goods of the first need, the answer before the changes in the consumption has been that of developing simpler, less elaborated products and that adapt themselves to a few more limited budgets.
Maria Tejero Salcedo
Source: foromarketing.com


