How To Sell Against the Competition
Blockbuster Video is struggling to stay alive. OnDemand movies and Netflix have taken a toll on the once-giant video rental chain. A few days ago, I caught this interesting price comparison poster pop up in the local Blockbuster window.
Price comparisons can sometimes win over cost-conscious consumers. But there’s a danger in using them. Since they focus a buyer on price, not value, they tend to attract very price-sensitive buyers. This makes it hard to raise your prices later – AND – if somebody enters the marketplace with lower prices than you…well, everybody flocks to them.
That’s why “cheapest-price competition” is a strategy seen most in either declining or mature industries where the product or service being sold is seen as a “commodity”.
It’ll be interesting to see how the whole Blockbuster Video / Netflix war plays out over the next couple of years.