Channel business these days is at the start of a new era of pricing. Having failed in its attempt to follow up on higher margins with feature-packed PCs, vendors and rising entrepreneurs are now coming up with a range of unbelievably low-priced PCs, in the hope of beginning a new price trend.
p____p Interestingly, this comes at a time when hardcore naysayers predicted that computer prices could not sink any lower. PC prices, however, are continuing to drop, as can be witnessed by the current trend in the market. And this trend has begun a new epoch in the �price war� of the PC industry.
p____p It is true that deep price cuts eventually lures PC buyers much more than the features of the product. Today PC prices are at an all-time low with rebates, bundled packages and schemes, as the festive season looms round the corner. While industry reports point to overstocked shelves and resellers bank on festive seasons to move old stock, most buyers perceive that now is indeed the time to buy. This is exactly what PC sellers want to take advantage of.
p____p The primary problem with low prices is that they look deceptively easy: low prices lead to upward sales. But what most people overlook is that price is a complicated product attribute.
p____p Moreover, any business house – small, medium or large -compares PCs from various vendors and assemblers, including setting up and maintenance costs, before preferring for the lowest price on hardware. All vendors today boast that they deliver quality PCs, but the smart business buyer also looks at what his needs are and the overall costs and maintenance. IT vendors need to tune to consumer requirements rather than dip prices because �everybody is doing so�.
p____p When vendors start dipping prices beyond a certain price point, the possibility of running into serious and complex issues dealing with security, after-sales support, maintenance, networking, wireless, costs, etc is very high. So, when the buyer adds up the lifetime costs of buying a PC and deploying it in a business, his opinion is likely to change from opting to a low-cost PC to a higher-priced PC with added value.
p____p The seller needs to carefully analyze customers, competitors, and its own company with special emphasis on the cost structure and strategic positioning. Besides low prices, a thorough customer analysis will help reveal what motivates buyers to purchase a product, while competitor analysis will help estimate pricing limitations and objectives.