Trying to Win on a Low Price Is Always a Losing Proposition for Small Consumer Product Marketers
Last week my Consumer Product Development and Marketing Consulting firm reviewed a multi-use child safety line of merchandise targeting the Juvenile/Infant category. This was a start-up Company with modest sales. The products were well engineered,Beige Grigio Hogan Uomo Interactive, nicely packaged and offered consumers fine features and utility.
The ownership group partners were keen on selling Wal-Mart and other big box stores. They had undergone a long,Christian Louboutin chaussures Pigalili 120mmvente pas cher, slow kabuki dance with the Bentonville giant for months. The hang-up, as always, was pricing. The merchandise staff at Wal-Mart wanted significant packaging changes, AND,Nike Air Max 90 Navy Blå Grå Hvid, significant price reductions.
If their demands were to be met, the product margins would be deflated to the point of no profitability.
We see this situation all too frequently. There is an understandable lust on the part of new companies,Nike Zoom Kobe IV (4) Sølv Grå Blå Sko, start-ups and entrepreneurs to push their goods into national chains as quickly as possible. The law of large numbers would seem to insure that this is the quickest path to gaining deep market penetration and profits. Alas,Nike Lunarglide Sort Hvid Sko, for small businesses, this is almost always not a successful strategy.
By the time we met with this juvenile product manufacturer they had exhausted much of their available resources and were not close to receiving the hoped for purchase orders from any of the big box stores they had approached. A decision they had taken to try to compete on a low price sales model was boomeranging on them. They simply could not compete with high volume producers on price. Having a better mouse trap is great if the item is positioned where quality, product performance and unique selling proposition can be beneficial. This is typically in specialty stores, independent and service oriented retailers where product can be well displayed and detailed to consumers by knowledgeable staff.
The opportunity to grow a brand and penetrate a market category first locally, then regionally and finally nationally is usually the safest, most prudent strategy for new consumer product marketers to utilize. Unless sales promotional budgets are large, and they rarely are for start-ups, the turtle will beat the hare in this type of race. Marshall your resources! Maintain your margins! Allow for needed sales promotion,Frauen MBT Kisumu 2 Sandale - 009, marketing and branding support that will be required to support your products.
We work with many small and micro-brands and start-up companies. Focus and discipline are often the most difficult traits for these anxious, ambitious entrepreneurs to harness. Advising them to avoid a low price strategy seems to go against the grain of accepted business orthodoxy. However, unless large scale production volumes can be employed to drive down costs, do not get involved in selling on low price alone.
Many multinational consumer product brands sell by initially employing an exclusivity strategy. They will introduce a line in limited distribution at high price points. As sales traction takes hold, the product is introduced in different mass market branding concepts at lower price points in broader distribution. It is always easier to come down in price than to go up. The Exclusivity Strategy creates consumer desirability for a product. Calvin Klein,Nike Free 3.0 V2, Liz Claiborne, Estee Lauder, General Motors,Dame Air Force 1, Nine West, Diageo, Fortune Brands,Nike Zoom Kobe 6 hvide Sort Grøn Sko, Procter & Gamble, Unilever and many other great Consumer Product Marketing giants repeatedly use this technique.
Being small actually offers the advantage of nimbleness. Large enterprises do not move fast. No matter how successful, when bureaucracies grow they become sclerotic. Use agility, quickness and energy to your advantage. "Float like a butterfly and sting like a bee",Rabatt Frauen MBT Sandalen Schwarz Sadiki, as Muhammad Ali so famously chirped when describing his boxing style. Do not allow large Companies production scale and low pricing to dictate your margins. It is suicidal to attempt to compete on their field of play.相关的主题文章：
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