Is increasing the efficiency and lowering the cost of manufacturing the only way to increase the low margin business? Could you not make a better product that people would be more willing to pay more for?
I suppose the difficulty then is convincing your customers that the new re-formulated product is better than the old one and thus worth a higher price.
Yeah, it can be difficult convincing customers that the product line they used to pay less for is now a more up-market product line.
But mostly, in this case, to keep things simple, I was assuming that each company already had one basic product line and one premium product line. You can fight for gradations of "our basic product is higher quality than their basic product, so we charge a higher price than other basic products" approach, but it gets hard when you're working within a price-defined market niche.
Is increasing the efficiency and lowering the cost of manufacturing the only way to increase the low margin business? Could you not make a better product that people would be more willing to pay more for?
I suppose the difficulty then is convincing your customers that the new re-formulated product is better than the old one and thus worth a higher price.
Yeah, it can be difficult convincing customers that the product line they used to pay less for is now a more up-market product line.
But mostly, in this case, to keep things simple, I was assuming that each company already had one basic product line and one premium product line. You can fight for gradations of "our basic product is higher quality than their basic product, so we charge a higher price than other basic products" approach, but it gets hard when you're working within a price-defined market niche.