China Food

How should brands reduce prices?

whether you understand price reduction is related to the long-term development of a brand.
During this time, several co founders came to me to communicate. The core question is: do you want to reduce the price?
Compared with promoting growth through content, reducing prices is a standardized and simple routine. As long as brands dare to reduce prices, sales will be able to rush. This is the idea of many people.
But in fact, the price is a very important part of the brand. The brand that only reduces the price seems to solve the dilemma that the product can not be sold in a short term, but in the end, it will not only make no money, but also hurt the brand.
This issue continues to share the content of daily communication with founders – about price reduction.
Background of each brand
Brand a:
1) At the pet track, red sea, the brand market budget is limited. I hope to return funds quickly, and I really want to reduce the price;
2) The private domain is strong and the re purchase is also high, but there are many activities on the platform. Do you want to keep up with the price reduction of the platform? How to balance and reduce the harm to private domain users?
Brand B:
The new brand just made is favored by the top experts in the industry. Experts hope to cooperate with the brand. The price is 50% off the price of tmall store. The founder is very excited because he is favored by the top talent and can quickly rush a wave of sales and industry popularity, but he is tangled. Do you want a 50% discount to meet the talent.
C brand:
The mother and baby track in the Red Sea is subdivided into category Top1, which is mainly engaged in food of origin B. peers launch a product of origin a, which is cheaper.
The boss faces a choice: does the store adhere to products of origin B or sell products of origin a? At the same time, the advantage of selling is to seize the users who will buy low prices, so that they will not lose to competitive products. Moreover, as a drainage model, users can also convert to product B with high customer orders.
The focus of the problem, I have to sigh that the inner volume of the brand is becoming more and more intense. The founders all agreed to start with the price.
But in fact: price is very important, but not fundamental.
It is easy to reduce prices but difficult to increase them.
For some brands, price reduction is promotion. For some brands, price reduction is self cutting.
Why is there a double 11? The list is basically large foreign brands. Obviously, domestic goods are also very expensive and cheap, but there is no sign of big promotion.
Because of big brands, people will think that price reduction is promotion. They can buy big brands at prices they can’t buy at ordinary times. After all, the money is limited, so big brands are preferred. Anyway, domestic products are often promoted and there is always a chance to buy them.
Big brands are expensive, but everyone thinks it’s worth buying big brands! This is a question of value, not price.
When you don’t show value, you can only use the way of sacrificing gross profit to fight a price war. Taobao tmall used this routine a few years ago. It can make money with more traffic and small profits.
Now the flow is hard won. If you still use this routine, you can either work hard or you can’t make money. In the era of content, we must reflect value. In fact, dozens of yuan, one or two hundred yuan do not need to be considered for a long time for most consumers at present.
Therefore, once involved in the price war in the industry, it can’t stop, and the playing method will definitely deform. Then the brand will be completely sold.
For these three brands, the core of the problem is not the price problem. The problem is that the brand does not know how to reflect its value.
So the core thinking should be: how to reflect the value of the product.
For the first question
How can price reduction reduce the harm to private domain?
Very difficult. The re purchase of private domain users is very strong, indicating that the brand loyalty and product recognition are very high.
However, once a user in the private domain, even one, finds that the price of the cat shop is lower, other users in the private domain will soon know. At that time, the re purchase of private domain was not only very poor, but also the user’s good impression of the brand would be very poor: “this brand always reduces prices. Is there a problem with the product?”. And it is also easy to have negative effects in the private domain: “I just bought it two days ago. Why did I cut the price today? I knew I would buy it today.”.
Therefore, for brands with strong private domain, if they participate in the activities of the platform, they can promote the occasional price reduction (the price is the same as that of the private domain), and greatly promote the breaking of the private domain price to be announced in the private domain in advance.
In addition, the brand founders want fast cash flow and don’t put too much pressure on inventory. There are two points to note:
1. Make great efforts in production, do not produce too much, cannot sell, and store in warehouses;
2. If the price is higher than the industry average, it is necessary to do a good job in the content and reflect the value. Brand education of private domain and fission of private domain users;
Do a good job in the content, including the content jointly built by talents, as well as the brand’s we media content.
Many brands are confused about building their own media content. They want to imitate other people’s exquisite content, but the team strength is not enough. They want to learn from others to build a content matrix, but in the end, there is only an account and no content.
The founder has really made great efforts in polishing the product, and the user’s feedback on the product is also very good. In fact, these can be used as content. Content, not just how good their products are, with gorgeous words to promote new products. Often true, credible and detailed content can move people more.
For the second question
The founder wanted to reduce the price very much. After all, the top talent was willing to play with the brand. Maybe it was the mood of the Imperial Palace being remade by the emperor. Top talent can not only bring goods, but also form endorsements.
But the key problem is to give the brand a 50% discount.
This brand is the second brand in the founder’s brand matrix. The first one is medium and low-end, and the second one wants to hit medium and high-end.
The brand has just been introduced to the market, because the product power is recognized by the top talent, and it is found on its own initiative. It is really a very good thing.
If Estee Lauder gives a 50% discount, everyone will think it is a price reduction, which will not affect the brand tone and image.
However, a new brand, brand tone and image have not been established. The price after 50% discount is the low-end price in the industry. It is very easy to have an impact on consumers: “know a new brand, things are good, and the price is very low”. With the help of the influence of top talent, this kind of user mind will expand quickly and widely. As a result, it will become Xiaomi in the industry.
Although Xiaomi has launched high-end machines, everyone’s impression of Xiaomi still stays in the “ultimate cost performance” rather than medium and high-end brands.
Once consumers form an impression of the brand, it is very difficult to correct it in the later stage, even if they pay a big price. Heart attack is the most difficult.
If your brand is not well known, there is still a chance.
Therefore, the blogger hopes that the brand will be 50% off. The psychology behind it must only want to buy and sell with one hammer, and will not take into account the long-term development of the brand at all. This is not a healthy way of cooperation that really wants to grow with the brand.
When other brands begin to roll in for price, the concern of the founders of other brands is not the brand, but selling goods. Don’t take the initiative to participate in the roll in, you will only kill yourself. The so-called brand positioning must find your own value and interpret the value to consumers.
Finally, we use other and better ways to communicate with the brand to avoid the damage caused by price breaking to the new brand.
In addition, in the communication of product selling points, we should focus on the crowd and speak out their concerns, instead of falling into the product itself and listing the selling points.
For the third question
This mother and baby food brand focuses on the products of origin B, the price is slightly expensive, and the details page will be compared with origin a to highlight their good and expensive reasons.
Therefore, if the store wants to sell products of origin a, I won’t. There are several reasons why you can hit your face:
1. It will cause a lot of customer service problems. Consumers are unprofessional. They all look like the same category of products, but the prices are different. At that time, they will ask customer service or even private domain questions;
2. The B details page has marked the origin of a and mentioned the shortcomings of the product. As a result, the store also has product A. consumers will feel that the brand is contradictory and say the shortcomings of the product. As a result, the store sells the product again.
Therefore, the root cause of such a problem is not whether their stores want to buy products of origin a and seize this part of the purchase flow. On the basis of the original products, we should analyze the products of origin B, value, differentiation and the actual advantages of the products and tell them to consumers. Let consumers really trust the product, which is what the brand should care about.
When competitive products are reduced in price and low-cost brands in the industry appear. Dear bosses, don’t be in a hurry to reduce the price. This is 2021, not 2011, when the e-commerce environment has the opportunity to be killed by the price war.
Price is a short-term stimulant, which can only bring short-term excitement, but the harm to the brand is long-term. Consumers come because of low prices and leave because others are cheaper. Loyalty and repurchase are very poor.
You can never be the lowest price in the market. Price reduction is the most non-technical play. What the core should think about:
  • How to highlight the value of the product and make the value of the product match the needs of the target population;
  • How to interpret the value of products through content, and let consumers perceive through appropriate channels and content forms.
  • How to focus on the selling points of products, penetrate a class of people and subdivide and cut into the Red Sea market.
However, you can’t pay high prices for high prices. If the price is divorced from the value, you can cut leeks.
Remember, don’t cut prices casually.
Author: Keny Wei; Source: Marketing Lao Wang (ID: wltx-2015), reprint has been authorized. Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
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