Entering New Markets: To Cut or Not to Cut Prices

Your price is high…

When you enter the new international market.

What can you do?

There are typically four ways to solve this problem:

1. Lower your price

Pros: You might have more price advantage.

Cons: You will lose margin.

3. Communicate the value of your products to fill the price gap

Pros: You don’t need to lower the price.

Cons: It requires some time to educate potential clients.

2. Find the segment who are not sensitive to the price and has demand for your products.

Pros: You don’t need to lower the price.

Cons: The segment might be competitive with a long sales cycle.

3. Localize your products with a new product line.

Pros: You can have more price advantage and product portfolio flexibility.

Cons: The manufacturing requires much more investment.

There is no perfect solution for this market challenge.

It all depends on the market and your business strategy.