Companies looking to avoid price wars
Businesses want ways to attract customers without giving up sales knee, hip and shoulder replacements, and for
By Martin C. Daks Corporate Strategy cardiovascular and other surgeries.
Anyone who’S ShoPPed for a home or a The critical need for precision-crafted
car lately knows businesses are cutting prices the trend, holding onto customers while hold- components delivered on time means his com-
to stay competitive during this recession. ing the line on pricing. pany can compete on service instead of purely
during the last 12 months, the consum- “instead of competing purely on price, we on price, even-esh said.
er Price index fell 1.3 percent — the largest focus on customer response and on maintaining “Some customers have cited the economy
decline since April 1950, according to the lat- the quality of our products,” said Alex Even-Esh, and requested significant discounts, but so far
est announcement from the federal Bureau of a partner and president of Pak Manufacturing. we’ve generally been able to say no,” he said.
Labor Statistics. his irvington firm makes surgical instru- “we have lost some customers to pricing, but
But some companies say they’re bucking ments used in orthopedic implants, such as not many.”
companies that stay close to their cus-
tomers and understand their needs stand a
Expand offerings, target market to support prices better chance of supporting their prices, said
Glenn R. Taylor, a member of the Livingston
When the financial markets crashed “We made a conscious decision to cPA firm Sobel & Co. LLC. Alex Even-Esh, president of Pak Manufacturing, says
in 2008, Nu-World Beauty Inc. chief exec- target the moderately priced mass mar- “Besides keeping close to customers, you’ve instead of competing through prices, his company
utive Jonathan Rosenbaum got worried, ket,” he said. “in boom times, we may got to know what your competitors are doing, focuses on customer service and product quality.
as did many other business owners. give up some potential profit margin, and consider how their actions may affect your
“But now, it turns out we’re having but in bad times, we’re not suffering the business,” he said. “Also, think about what kind of Price sensitivity is usually tied to two
a banner year,” said Rosenbaum, whose way the high-end market is. So far, we other policies you may be able to implement.” issues: having a niche, or creating value, said
300-person carteret-based company haven’t had to cut our price points.” he said a new Jersey-based beauty salon Howard Cohen, managing partner of Amper,
makes fragrances, lip gloss, creams and in fact, he said, nu-World is expand- recently started to accept credit cards, but Politziner & Mattia LLP, an edison-based
other products for Victoria’s Secret and ing its product line. offered a discount for cash-paying customers. cPA firm.
other companies. “We did about $50 “We maintain close contact with “Accepting credit cards gives custom- “if you’re not just offering a commodity
million in sales in 2008, and we’re on our customers, so we know what they ers more flexibility, and apparently helps to product or service, you may be able to hold the
track to do $70 million this year, even in want,” he said. “then we manufacture encourage them to make impulse purchases of line on price,” he said. “Alternatively, if your
this recession.” products to meet those desires, and it beauty products,” Taylor said. “Also, the price firm delivers value, perhaps through post-sale
Part of the reason is his market fo- keeps everyone happy.” markup for credit card transactions basically support, you may be able to take your cus-
cus, Rosenbaum said. — Martin C. Daks covers the processing and other fees the shop tomer’s eye off the price.” u
has to pay to the credit card companies.” E-mail to firstname.lastname@example.org
Making change a major test for Committing managers to changing strategy
companies struggling to survive When it comeS to change, experts say
the medium is often the message.
“employees often take their cue
ware of bureaucratic stonewalling, said