Price/Volume Margin/Quality

There are really only two business models to choose from -  low price and high volume OR high margin and differentiation (also termed quality in product, service, image or other).  Both models are difficult and are always subject to intense competition.  You can get into all kinds of arguments about whether you can do both - low price and high quality.  I contend the answer is no - because it is all about process and people and it takes constant modification, teaching and reinforcement in the continuous improvement curve focused on price or quality. 

Susan's store is an example of the tension of this issue.  Should she price the same as Nordstrom?  Should she carry similar items?  The list goes on and on.  LCP Tech and my partners face this issue.  Price Nanocleanse for volume or keep the differentiation high and price the product for the value provided.

Growing up in Accenture,  I am brainwashed into the high margin/high quality area.  That takes greater sales and marketing costs and on the top line looks like slower growth.  But it provides a large cushion between price and cost for strategic discounting where other values could be found - R&D, recession stimulus, employee training & development etc. etc.

It is so tempting to "drop the price" thinking more sales will automatically come.  But that is being lazy and not spending the time to find more value to provide the customer with the existing business model.  In the end the customer votes with his feet.