Question

Paul Bowlin owns and operates a tree removal, pruning, and spraying business in a metropolitan area with a population of approximately 200,000. The business has grown to the point where Bowlin uses one and sometimes two crews, with four or five employees on each crew. Pricing has always been an important tool in gaining business but Bowlin realizes that there are ways to entice customers other than quoting the lowest price. For example, he provides careful cleanup of branches and leaves, takes out stumps below ground level and waits until a customer is completely satisfied before taking payment. At the same time he realizes his bid for tree removal jobs must cover his costs. In this industry, Bowlin faces intense price competition from operators with more sophisticated wood processing equipment, such as chip grinders. Therefore, he is always open to suggestions about pricing strategy.

How can the high quality of Bowlin's work be used to justify somewhat higher price quotes?

Answer 1

High quality of Bowlin's work can be used to justify somewhat higher price quotes because most of the companies who provide lower quotes than Bowlin's company do not do quality work and customers are not satisfied with their work. This leads to rework and customers have to spend again for proper removal of trees. But Bowlin never compromises of quality of work and ensures that the work is done completely and cleanup of branches and leaves is also properly done. This makes customers satisfied and no rework is required, i.e. customers do not need to spend anything more. Hence Bowlin's work can be used to justify somewhat higher price quotes.