Making a business mistake

Why competitive pricing is not always the answer

When you are entering or expanding in your particular market, Ronn Torossian says it’s a mistake to depend entirely on price point to deliver customers. There are a lot of reasons why people believe price can save them in a head-to-head market battle. But there are many reasons this assumption can turn into a business-killing mistake.
Ronn Torossian, founder and CEO of 5W Public Relations, delivers three reasons why your price matters…but not as much as you might think.

#1 – Someone can always undercut you is an interesting example of this phenomenon. Even on a site where they can certainly control the supply and, thus, the price point, independent sellers can undercut Amazon’s prices. The site still gets a cut of these sales, but not nearly as big a piece of the pie. They allow this setup because they still control the point of sale, but many other online retailers make this mistake without the clout to combat the loss. Torossian says retailers are always in danger of going up against competition that can undercut them at will.

#2 – Price is more about value

Price really isn’t about price. It’s about perceived value. When you are placing your product or service in the marketplace, you need to consider what the perceived value of that product or service is for your target market. Excellent public relations includes efforts to increase and control the public perception of value with regard to your products or services. If you can somehow effectively use target public relations to increase the perceived value of your offering, your business will likely increase whether or not you decrease the price. In fact, in some cases, lowering the price actually decreases the perceived value, thus causing you to move fewer units.

#3 – Value added can trump actual cost any time

“Value-added” aspects are those that transcend both assumed value and intrinsic value. These can be special offers, extra features, new upgrades or any one or more of a host of aspects, items or ideas that create special and specific additional value to your product or service. Seems obvious, right? Well, then why do so many products or services enter the marketplace without first considering the potential value-added opportunities? Ronn Torossian sees this far too often in his work.

“A client will come to me wondering why they are not doing well in the market and I will ask them how they are positioning their product. That’s when I hear a litany of the same ol’ same ol’ chatter that everyone uses. People, that just doesn’t get it done.”

by Ronn Torossian for on
9/17/13, 10:15AM

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Ronn Torossian is the Founder, President and CEO of New York-based 5W Public Relations. He has overseen the company's rapid growth and expansion to the Inc. 500 list, as well as provided counsel to hundreds of companies, including members of the Fortune 500, Inc. 500 and Forbes 400. His work spans global interests, corporate entities, high-profile individuals, regional business entities, government agencies and academic institutions - both on routine public relations matters and extremely sensitive issues. One of the foremost public relations experts in the U.S., Torossian is known for his aggressive, results-focused orientation, as well as his close working relationships with members of the media, influencers, decision makers, politicians and celebrities. At 5W Public Relations, Torossian's client experience has included programs for Coca-Cola, Microsoft, Anheuser-Busch, Barnes & Noble, Cantor Fitzgerald, IHOP, McDonald's, Evian, EDS, VeriSign, XM Radio, Seagram's, The Loews Regency, Bad Boy Worldwide Entertainment, Marriott Hotels, Vail Resorts, Pamela Anderson, Snoop Dogg, the Government of Israel, and others. Referred to by The New York Post as a "publicity guru," by Fox News as a "high-powered PR CEO," by Tyra Banks as a "crisis management guru," and by CNN as "a leading PR expert," Torossian is regularly featured in and quoted by the media, including by CNN, Fox News Channel, MSNBC, NBC, The New York Times, and others. CBS National News said "Ronn Torossian knows spin," and a New York Times feature story on Torossian referred to him as "The consummate hard-driving, scrappy NY publicist." Earlier in his career, Torossian was a Vice President/Group Director for one of The InterPublic Group's (IPG) largest PR agencies, where he was responsible for significant client growth and successful client programs, including work for Clinique, Fox News Channel, DHL, Hard Rock Café and others. A resident of Manhattan’s Upper West Side, Torossian was named to the Advertising Age "40 Under 40" list, PR Week's "40 Under 40" List, is a regular lecturer at universities and conferences, a member of Young Presidents Organization (YPO) and a board member of numerous non-profit organizations.