The Lower the Price the Better?

Entry # 7 Jung Won Kim 20700158

The economic situation for everyone is not very good these days, especially for Korea and the States. Because of the many scandals that Samsung, who is in charge or 18 percent of Korea's income from exports , Korea's economy has gone down. During such a harsh economy, most businesses will try to approch a strategy to make their prices for a product as low as they can. Is this always the best strategy?? Just by lowering the price of your product, does that mean people will buy more of your product? Maybe, in the short term it will work, but for the long term and for the value of your product, I think you need to make your product a little bit more expensive than the reasonable border line price. People will buy starbucks by paying a few more bucks because they are not just buying a cup of coffee. They are buying the image, the experience, that short relived part of life where starbucks suggests only they can do. I think it is very important to be able to offer a service that no one else can do it in a way, or maybe form a good image of the quality of the product so that people will buy the product, not necessarily for its quality but because of the brand name it created.


Sources: http://www.businessweek.com/smallbiz/content/apr2008/sb20080414_027855.htm?chan=search