All food truck vendors are confronted with low price rivals. The solution isn’t to lower all of your prices and start a price war. This will only result in lowered profitability for every food truck involved. So, what can you do to compete with low priced competition?
Today we’ll cover several strategies that will help food truck vendors make sure they have a fighting chance against these competitors.
Strategies For Food Truck Vendors To Fight Low Price Rivals
The first step in fighting low price rivals is determining the if your prices are the lowest they can be. This requires consideration of each and every cost involved in bringing that item to the service window. These costs will include those involved in preparing and presenting a menu item, and even the marketing used to bring customers to your truck.
Never adjust your prices without knowing these costs. If you leave out any key costs including your desired profit on each item, you’ll quickly learn that you’ve priced yourself out of business.
Differentiation is a food truck’s best line of defense against all rivals. It is the basis to the long term success of your food truck. Differentiation is defined as finding a significant point of difference that creates a sustainable competitive advantage. In these situations, food trucks have to clearly communicate what differentiates them.
Learn About The Consumers In Your Market
Vendors need to understand exactly what consumers in your market want and what they are willing to pay for it. Focus your efforts on excelling in those areas of demand. This style of market research requires that a food truck places the customer at the heart of your marketing strategy to create customer value.
Create Prices Based On Value
When prices on your menu can’t be lowered, focus on the ways you’re ahead of your low price rivals in terms of quality. Customers care about price, but they care more about the quality of what they’re getting for their money.
Value based pricing is based on understanding the overall value of an offering to any one buyer. Establish a solid pricing process that will enable you to differentiate your pricing across distinct market segments. Understand how you create value for your customers and what that value is worth.
Rather than lowering all of the prices on your menu, you could develop a menu item that will compete head to head with the competition. This will allow you focus on your ability to produce high quality dishes in while still providing a lower priced option to maintain your competitive edge.
The Bottom Line
Low price mobile food vendors will continue to show up in the food truck industry, and some will succeed. However, there will always be two kinds of consumers: those who buy on the basis of price and those who prefer value. For that reason, there will always be room for both low priced vendors and those that are value added food truck.
How much room each will have depends on the food truck industry and consumer preferences, but also on the strategies food trucks deploy. If truck owners don’t deal with low price rivals quickly and effectively, they can only blame themselves on their failure.