But you have to compete on price, it's down time, it's credit crunch, it's recession, we all know that but that is not the only way to do business.
Agree that customers are more prudent and price driven in this time this does not mean competing on price should be the only strategy for your business and here are few reasons why:
a) If price is the only thing you have to offer than you have nothing unique to offer, as someone else is guaranteed to be cheaper than you.
b) It would not take much for your competitors to lower there prices.
c) Cheap is often perceived to be of low quality.
d) If you are not the biggest buyer or biggest seller in your market you can't be the cheapest so how exactly would you compete on price?
e) Customers always buy based on what value they get for every penny they spend and they don't just spend cause it is cheap. So adding value is the way to go about.
d) You risk of commoditizing your business.
Photo credit: Flickr