How Bargaining Powers of Buyers Determine Business Growth?
Bargaining Power is essential to the growth of the business; however, some important aspects have to be put in perspective to balance the equilibrium to scale the business growth. When discussing the bargaining powers of buyers, the following vital aspect is a must.
To build customer loyalty companies strive to manufacture goods of higher quality. The quality of a product attracts consumers who want to obtain the quality for their money. The higher the quality, the higher the number of consumers, hence increase in business growth. Nevertheless, the company must consider the current market pricing of substitute products to achieve competitive pricing. Customers tend to look for an alternative when the pricing is not pocket friendly. To further, gain consumer loyalty under the bargaining power of the buyer’s more excellent service is mandatory. The need to cautious approach is mandatory when dealing with consumers; when handling them, care is mandatory; thus, the guiding principle is that consumers are always right. Their feedback in service delivery not only attracts new consumers but gives the firm heads up on where and how to improve in that particular department.
It is worth to state that buyers are authoritative when they buy large quantities of products. In essence, the firm has no alternative but sale to them at a subsidized price. By doing so, the firm achieves customer loyalty, and in essence, business grows. If the company product sold is the main product, in terms of annual revenue. The company has no option, but further stamp its authority in the market by selling at a discount. Failure to adhere to the current market demands, the customers tend shifting to other products that are of lower price. The preceding negates the sole purpose under which the company operates.
The bargaining power of buyers determines the establishment of a brand and the overall growth of the company. However, the cost of production and the availability of raw materials must correspond to the pricing of company products. In order to realize profits balance of the cost of production must correspond with the market value of products.