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  • Below-Market pricing

    By setting prices below those of competitors, some firms hope to attract a sufficient level of volume to offset lower profit margins

    This also allows them to eliminate services which would otherwise be necessary with higher prices.

    However, in most cases this is a short term strategy as larger companies with a greater pool of resources often undercut the price of small discount retailers.

    Unless a company truly is a low-cost producer, it would be better of building its competitive edge on something other than price.