To mitigate the risks associated with underpricing, businesses can adopt several strategies:
1. Value Addition: Instead of just lowering prices, add value through better customer service, additional features, or loyalty programs. 2. Gradual Price Increase: Implement a strategy to gradually increase prices as the product or service gains market acceptance. 3. Market Research: Conduct thorough market research to understand the optimal pricing strategy that balances customer acquisition with profitability. 4. Brand Positioning: Maintain a strong brand position by focusing on quality and customer experience, even if prices are initially low.