Price War - Don't compete on price

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" Hi Evan, ''competing on price is a recipe for failure'' why is that?

I have a guest house in Pretoria, and whenever we lower our price (to R600.00), we get more sales. As soon as we increase our price (to R650.00) we get so much resistance that we got to lower the price again. It seems to me that people are price sensitive in these days and prices does play a role.

So that is the reason for my question above. Colin Brazendale"

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