Focus on achieving customer satisification rather than cutting price. Customers, who are bargin hunters will flee to businesses that offer lower price. These type of customers are always looking for cheaper product and customer loyalty is a function of price. For every one large discount store, it destorys 100 smaller businesses while attract high volume of customers at low prices and profit margins. These companies expect people to buy more product because of the lower price and profit off the higher volume of sales. So, the lower profit margin per product is offset by higher volume of products sold. The only way to combat the discount business model is to offer better service, more specialized products, and a stronger focus on meeting customer expectations. Rather than seeking larger numbers of people, emphasis a business model with a selective group of customers with more disposable money, and selective tastes for products and services; stay on the upper pyramid of product and service differentiation. For example, Boston Market thought, if they offer discount coupons, they would increase foot traffic into their stores and the clientele would love their food. So they offer coupons and increased traffic, slowed down service time per customer, fustrated the clientele that should have become their loyal customers and attracted the wrong type of customer. Boston Market stock valued at $41 share price plummetted to 33 cents, as the company cut its coupons and the clientele seeking discount priced food fled. The prime customer was also fed up with delayed service and the company entered Chapter 11.[Learn More ...]

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