Reducing prices come at a cost. Either it reduces your profits or leads to degradation of the quantity of raw materials and human resources used. And most of the time we don't let go off our profits, do we? So the quality of raw materials gets affected eventually. Which leads to a long term damage to the reputation of the firm. 

Putting one's service and uniqueness forward gives a long term benifit. So you'd never see results coming quickly. But, uniqueness attracts new customers and services maintains them. Good after sales services also helps the word of mouth spread and thereby leads to increase in sales. 

When you reduce price, you will attract customers quickly. When you improve your services and innovate at regular basis, it attracts loyal customer base. Customers easily attracted by reduced prices can also easily leave in lue of a cheaper alternative. And loyal or disloyal, whatever type of customer base you create initially will attract the same kind. 

So you decide, what's better? 

Decreased price, increased demand, expense on advertising and marketing, less profit and a disloyal customer base. or

Consistent price, increased hard work, expense on research and development, consistently increasing demand, consistent profits and an ever growing loyal customer base.