Can someone tell me how to deal with a pricing war with an individual who has opened a similar biz like yours in the same vicinity and has dropped prices to rock bottom to attract customers since his business is new…
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Nipe kazi tumalizie yeye
Hata Nakumatt walikuwa wameuliza hio swali jibu likakosa
leave him be. he cannot sustain.
kwani ni biz gani hiyo?
Improve on your quality, save and diversify. In other words dig in for the long run. Price wars don’t last for long, it wouldn’t make business sense. Just ask YU or Airtel how that worked out for them.
this is point on ,its all about strategy.
that’s a poor business strategist. If you are certain what you charge always makes you comfortable to keep the biz running bila kugonga mtu, and the calculation in his price reduction will make him bow out soon, leave him be. But now it is the two of you, you have to work extra hard to break even, and quality matters. Also you already have a customer base he can not beat. Do not worry.
mostly happens with these salons, kinyozi, cybers, et al. Mtu anaweka ma graphics na muziki kubwa and employ cute slayquuens and good ambience wewe ukibaki hapo na old chairs and woofer ya 2.1 yenye imeraruka ukicheza reggea zako.
No need to worry.
Stick to good quality, treat your customers like kings/ queens.
And they will ALWAYS be coming to your business place.
For me, quality matters more than price. I will always fetch
what is quality irregardless of the price.
that, my friend, is what is called competition and it is what leads to innovation.
Necessity is the mother of invention
i had same problem sometime back, biz iliwekwa kama yangu kwanza 1st floor nikiwa second. nugu customer aningia kwao akiuliza kwa karzai wanasema ni hapo kwao,walikuwa wanatake advantage ya billboard yangu ata hawakuweka yao.Nilisema haidhuru na msemo ya kikuyu:(" ngombe itire hindi ire cia ninira iria ingi nyeki") yaani ngombe haziwezi malizia zile zingine nyasi malishoni. Nilikaa ngumu na kuongeza vituzingine apart from zile nilikuwa nadeal nazo,pia nikaweka services na after sale services…manugu hawakusurvive 2017 ,kwanza election period vile hakukuwa na customer…but in business kama ni mambo na rent always kuwa umejipanga,that is ukuwe na pesa umeset aside ya emergency yaani unaweza lipa rent miezi kama nne in advance hata kama unafungua bizna ama hufungui. si eti bizna inakuwa mbaya one month unashindwa kulipa rent.
Price wars work. Trust me. If a competitor with larger capital reserves and financial muscle sets shop next to your shop, he can run his shop at no profit for nine months just to drive you out of business. Also, if he is larger than you, he can get better quantity discounts than you and then drive you out of the market. You will be unable to compete with him pricewise because you dont buy at the same cost. About improving quality, some things are factory made and hence he cant improve their quality. If he sells shoes for instance, he cant improve their quality. The example you gave about Yu and Airtel is also misinformed. Safaricom has a captive market so no amount of price wars will ouster it from the top position. For most people, their safaricom line is part of their identity. They have already shared it with too many customers, the government, used it to sign up in too many subscriptions to let it go. This guy does not have a captive market like Safaricom. As you said in the end, he can save and diversify. That is true and it is his only move going forward. Saving, diversifying or innovating.
:D:D:D:D:D
Do you have a business?
Don’t make excuses for faulty products or lazy management. YU and Airtel failed in price war and almost all products until now because of poor service period. Cheap products can’t cover for nonexistent service. Someone said here recently that Airtel 4G is a myth only possible in a few masts in Nairobi. Anywhere else you need to sit under the mast to experience it.
Tafuta plan b but keep your own customers this is the time to evaluate yourself know your strengths and your real customers the fake ones will leave peacefully
@Nyadist it depends on how well you were prepared for the trough that was inevitable (see diagram). It is time to put your reserves (if you have any) to work for the business as @karzai has said up here. [ATTACH=full]163627[/ATTACH]
and if you don’t have any liquid reserves at least you still have the goodwill of your old customers and suppliers that your upstart competitor doesn’t have that you can count on as you dig in to fight for your space at the top.
one of the worst mistakes you’ll do is to spend negative energy thinking of how to harm the competition instead of focusing your positive energy on improving your customers’ experience to maintain loyalty.
Kamua kunguru yake
I have a business, so I know what I am saying when I tell you that price wars work. The only reason other companies can’t dislodge safaricom easily is because of its captive market. As I said, he can only diversify, innovate or divest to another venture. He has no captive market like safaricom!