keep the cost within certain limits;
invest in quality.
If you see that a “substitute” has appeared for indonesian numbers a product, monitor the market to avoid trouble.
Competitiveness can be assessed by how ready the buyer is to switch to an analogue. And you must agree that if this product is much cheaper and is not inferior in quality, then the probability of losing a potential client is high.
For example, if a new gym with good equipment, a swimming pool and affordable prices opens in your area, then a regular room with a treadmill is unlikely to be relevant. In this case, he will have to expand and come up with new offers that will interest customers.
When competition between substitute goods arises
Competition between substitutes arises for the following reasons:
Increase profitability by trading in large volumes.
Direct influence on price formation. If the cost of your goods is too high and differs greatly from that of similar goods, then hardly anyone will buy them. This is, at the very least, inappropriate.
Buying substitutes is quite profitable, especially if the price-quality policy is quite loyal.
Naturally, the demand for interchangeable goods is quite high, and the competition that exists between them is connected with the desire to gain a leading position in the market. To do this, manufacturers/sellers of substitute products are forced to:
increase advertising spending;
increase monetary investments to improve the quality characteristics of the product.
Naturally, competition can be increased from the outside. This usually occurs as a result of introducing domestic goods and imported products to the market, which:
have identical properties;
have similar areas of application.
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Working with sales of interchangeable goods
If you sell a product that has no analogues, then consider yourself lucky: you can set the price range almost freely (within reason, of course). In any case, there will be people who will buy the product and will not exchange it for anything. If this product has a substitute competitor, then you should approach the setting of the price more carefully: the price cannot be taken out of thin air, that is, just because you wanted it. You will have to evaluate the product market, understand how much a similar one costs on average.
Sometimes it happens that the final cost of a substitute is much higher than that of the original product, but even such substitutes find their buyer. Perhaps the analog product has something that will interest the client. A striking example is the Tesla car, which is considered environmentally friendly.
Tesla Motors
However, this is more an exception than a rule: people usually expect low cost from substitutes. And in general, the more interchangeable goods there are on the market, the higher the competition and the lower the prices set for products.
The role of marketing strategy is important here, because it is advertising that must convince the consumer to buy your products and no one else's. And you must make it clear to the client that this product is much better than substitutes, even if they are almost identical in characteristics.
The main rule: to successfully sell substitutes, you need to competently combine the optimal price and high quality of the goods. This is possible if you select excellent raw materials, find an innovative production method, find reliable suppliers, etc. Interchangeable goods on the sales market are quite specific, their properties must be very close to the original. Moreover, these products must be significant for the buyer - no one will go to the other end of the city for a cheaper product. Rather, you will simply go to the nearest store and buy what is presented there (even if the cost of the product is somewhat higher).