My column in this week's Tennessean looks at pricing strategies for start-ups.
When a business enters the market with prices well below the rest of the competitive landscape, which is common with many new entrepreneurs, they make a statement to potential customers. Setting a below market price creates a phenomenon that I call "apologizing to the market."It's as if the entrepreneur is saying: "We are not as good as the rest, but hope our low price gets you to buy our product anyway."
Entrepreneurs need to set a price that puts their product squarely where they want to be in the minds of potential customers. "We are as good as the rest." Or "We are better than the rest."
