In business, the aim of every company or business
firm is to make good profit while keeping long lasting customers and attracting
new customers each time with products and services that are solution oriented
and are in constant demand. However, there are several major determinants of
profit margins and successful businesses. Two of these key determinants are
price and quality of products / services which these businesses offer. The
priorities of the customers who patronize these products and services should be
taken into key consideration by every business establishment. Even when the
issue of competition with other companies that offer the same products and
services, prices and the quality provided gives one company the edge over the
other. Jumia Travel, Africa’s leading online hotel booking portal delves into
this topic.
The importance of both price and quality to the
success of every business entity can never be over emphasized. Although these
two key elements are affected by several other individual factors, they are by
far the two most prioritized parameters that customers consider when purchasing
a product. They are so important that they walk hand in hand. Below are some
dynamics of price and quality with reference to customer priorities.
High quality at a high price - This
is probably the most feared of all the dynamics. With high quality almost
always comes a high price since the cost of production, quality assurance and
other preparatory elements are very high which translates into high prices. For
some customers, quality may be paramount and hence, irrespective of the price,
they will purchase the item. For many other customers, the price of the product
or service is often compared with the quality of the product and hence even if
the product is of extremely high quality, they will look for other options.
Low quality at a high price - In
this type of dynamic, there is often little or no gain for businesses. It’s
often a rip off or exploitation and only certain type of consumers fall for it.
Most customers will never buy products or utilize low quality services if the
price is very high. It is simply a no-no. In rare occasions where customers are
in dire need of the product or service with no other alternative, they might
just take it as it is. But this kind is very rare.
High quality at a low price - In
this type of dynamic, customers rush to producers or service providers. This
happens mostly during discount sales and promotions. In most cases however, a
few very smart customers will buy large quantities and sell for a much higher
price. Although a high quality product that goes for a very low price will
attract more customers, it has a devastating effect on businesses since the
revenue normally doesn’t match the costs of production. For customers, this is
the best suited dynamic for them.
Low quality at a low price -
Finally, the dynamic that allows a multitude of consumers to play in the market
as they wish. Although the quality is low here, a very low price means that
customers naturally jump to it. Some may consider the quality and buy less
while others may just consider the price fall and buy in bulk.
Maybe to sell at a higher price later.
In conclusion, low quality doesn’t necessarily mean low quality whereas a high price doesn’t also guarantee a high quality. Both price and quality walk hand in hand. Therefore it is up to every individual customer to prioritize. Whether price or quality, it is an established fact that every customer wants a high quality product at a very reasonable yet affordable price.
Credit : JumiaTravel
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