7 Keys to Marketing Genius: No War
The following is an excerpt from The 7 Keys to Marketing Genius by Michael Daehn
Excess sales promotions by one company usually lead to retaliation by competitors. Each side continues to lower the perceived value of its product until both are in trouble. Consumers are usually happy but, in the long term, price wars affect everyone. If one of the companies goes out of business, then people lose their jobs. In other cases, one company outlasts the competition and is able to take over the market. They then raise their prices higher than they were at the start. I’m for a free market economy and I believe that the market corrects itself, so you have the freedom to lower prices and use sales promotions as much as you desire, but smart businesses will differentiate away from price.