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Minimizing price conflicts in strategic marketing

Minimizing price conflicts in strategic marketing

Price conflicts are inevitable when it comes to a competitive market structure, except for Oligopoly where the few sellers with closely identical products try to use methods other than price cutting to compete. The marketing department of any organisation has the crucial responsibility of being the HR to the products being held out for sale. What the product can do, how is it different from the competing products already available in the market and mostly, what it can't-do, to a keen observer. Often it is seen that brands wage a full-fledged price conflict with the competitor as a way of marketing their own product, and this applies only to normal commodities and not luxury items, because of the Snob effect.

Price is basically made up of two components-cost and profit margin. A firm has to cover its average variable cost to stay in business in the long run. Reducing the price of a commodity might mean lower profit margin or cost-minimizing techniques of production, the latter being more suitable. While marketing a product, a consumer's basic requirement is seen as larger quantity at the lowest price. However, the commodity can be marketed for having features not found in any other in the market.

For example, the telecommunication giant Airtel's marketing as "Promises", like promising to add on the previous remaining mobile data to the present one, or even the test by Oopna which declares Airtel to be the fastest mobile network. Airtel does not need to provide free calls or mobile data to lure customers into its subscription-a promise and a test is enough.

What price conflicts do is distort the free market demand and supply structure-the kind that causes deadweight losses when the government tries to intervene. Price is a signal for both consumers and producers to make decisions regarding consumption and production, and these, when distorted, affect producers more because consumers confused between two companies in price conflict will move on to another competitor, which might be inferior and might not have endorsed it's product enough. Also, the momentary shift of consumers to the lower priced product during a particular period of time makes the buyer base of price conflicting companies very shifty, buyer base being the main source of feedback for their product to develop.Price conflicts must be minimized and considered the last option when the product features aren't securing enough market share for the company.

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