58 innovative plans for marketing

Chapter 11 Price Planning (1)
As the saying goes, "There is no product that cannot be sold, only a price that cannot be sold."Price planning is a process based on the economic value of consumer demand, comprehensively considering various influencing factors, determining price targets, methods and strategies, and formulating and adjusting product prices.

Price planning is the key to product marketing planning.With the strengthening of homogeneous competition and the constant change of consumer demand, the industry and the market are gradually maturing, and the rational price planning is becoming more and more prominent in the market fighting elements.For the skilled operation of price planning, it is necessary to master the pricing objectives, pricing methods, factors affecting prices, reasonable timing of price changes and price combinations, etc.

Classic look back
In 2003, the launch of the North American version of the new Accord ended the tacit understanding that the Chinese mid-range car market was peaceful and reluctant to sell at high prices. Its pricing almost established a new standard for the pricing of all domestically produced new cars that year, causing the prices of my country's auto market to decline as a whole. the trend of.What followed was the continuous downward pressure on prices and the continuous blowout of the market that has continued to this day.

In 2003, Guangzhou Honda took advantage of the opportunity to launch a replacement model to comprehensively upgrade the vehicle configuration while significantly lowering the price. In January 2003, Guangzhou Honda New Accord rolled off the production line.At the off-line ceremony, Guangzhou Honda announced the pricing of the new Accord, and announced that in 1, Guangzhou Honda would not lower the price.Its newly announced price system shocked the entire automobile industry: the price of the new Accord sedan with a displacement of 2003 liters is only 2.4 yuan (including freight).Before that, the price of the old Accord sedan with a displacement of 25.98 liters that was in short supply was also 2.3 yuan, not including freight.This means that Guangzhou Honda has actually lowered the price of the Accord by more than 29.8 yuan, and the engine, gearbox and body of the new Accord have all undergone a new design, and the vehicle's operability, comfort, and safety have all been improved. .

The price of the new Accord has been lowered by 4 yuan, while the displacement, power, torque, and technological content have all increased, and the price/performance ratio should be around 5 yuan.Including the value of new technology upgrades such as the new Accord's interior, engine and chassis, the price difference is estimated to be 6 yuan.The price of the old Accord 2.0 is 26.25 yuan, which is 3000 yuan higher than the new Accord.The low price of the new Accord by Guangzhou Honda is based on the premise that the old Accord is still very popular.Although the industry had expected that the price of Guangzhou Honda's new Accord would be significantly lowered, the pricing of the new Accord still caused an "earthquake".

The one-step pricing of the new Accord has affected the price of the entire mid-to-high-end car market. This pricing strategy of Guangzhou Honda has been carried through to the marketing of Fit models that have been rolled off the assembly line. The benchmarking of the price system has prompted the price of domestic mid-to-high-end cars to return to "value", and promoted the price of Chinese cars to gradually align with the international market.Several models produced by Guangzhou Honda have been in short supply in the market for several years. In 2003, Guangzhou Honda even achieved a sales growth rate of over 11.7% with a sales performance of 100 vehicles, becoming the car manufacturer with the largest growth rate.This year, the output of my country's cars also exceeded 200 million for the first time, reaching 201.89 million, a year-on-year increase of 83.25%.

It is not difficult to see from the pricing strategy of Guangzhou Honda New Accord: an appropriate price system can generate a huge boost to product sales.

Skillful touch
The setting of prices should not be arbitrary, but should follow certain principles.This principle is to not only take into account the short-term interests of the enterprise, but also consider the long-term interests of the enterprise. It is necessary to show flexibility and flexibility, and not violate relevant laws and regulations, so as to be beneficial, lawful, and moderate.

Favorable principle.That is, the price level must be beneficial to the enterprise and be able to achieve the business objectives of the enterprise.Regardless of whether the price is set high or low, it must be conducive to improving the competitiveness and market share of the product, and ultimately ensure that the enterprise can obtain as much profit as possible.

Law-abiding principles.That is to say, the formulation of product prices must conscientiously implement relevant national policies, such as new product pricing policies, high-quality and high-price policies, floating price policies, etc.

A reasonable price limit is the degree of pricing.A reasonable price ceiling is acceptable to consumers, and the sales volume of the product can exceed the break-even point; the bottom line is that the selling price is higher than the variable cost of the unit product, which can bring marginal benefits.A reasonable price is for the enterprise to obtain a reasonable profit, not to seek the highest profit.

thinking innovation
For the price system planning, corresponding methods should be adopted for different industries and different types of enterprises, such as adopting mantissa pricing and psychological pricing in the process of setting prices for daily products; lowering the prices of some commodities when shopping malls open , so as to attract the attention and attention of consumers; when new products are launched, go low and open high, and use the price difference to stimulate middlemen; combine pricing with complementary products; create scenarios to set prices at the terminal; when other products drop in price, do the opposite To put it this way, on the one hand, launch lower-priced products, and on the other hand, increase the price of the product; payment methods can be adopted in installments, zero down payment, and cooperation with financial institutions; two-step pricing can be adopted, determined according to the frequency of use; etc.

Practical points
The complete pricing procedure includes the following steps:
1. Select a pricing objective.The price targets chosen by enterprises usually include: profit targets, including current profit maximization targets, moderate profit targets, etc.; sales targets, including maximum sales targets, maintaining or expanding market share targets, etc.; competition targets, including coping and avoiding competition targets, Maintain business survival goals, etc.

The value-based price decision-making aims at maximizing the difference between the value and cost created by the enterprise for consumers, that is, to obtain the due profit from the value created by the enterprise.

2. Calculate product cost.Product cost is the main basis for pricing and the lowest economic limit.Therefore, pricing is inseparable from the accounting of product costs.Planning at this stage should focus on grasping the value of the product itself and the relationship between supply and demand of the product, especially the price elasticity of demand for the product, the price regulations of the national policy, the value of currency, the influence of currency circulation laws, and the influence of consumer psychology on pricing. impact etc.

3. Investigate and predict competitor responses.Under the condition of commodity economy, competition is everywhere.In particular, the marketing price of products is one of the most sensitive competitive factors in the market.Therefore, when an enterprise conducts price planning, it must fully consider the possible responses of competitors, grasp as much as possible the pricing situation of competitors, and predict its impact on the pricing of the company, so as to adjust and formulate a price strategy that is beneficial to itself and other factors. Marketing strategy.

4. Select a pricing method.There are many pricing methods for enterprises to choose. After analyzing and measuring the influence of the above factors, the enterprise should use the price decision theory to choose a certain method to calculate the basic price of the product, that is, according to the product cost, market demand and competition situation. Wait for three elements to choose a pricing method.

5. Determine the pricing strategy.

6. Determine the final price.

Scene reconstruction
1. Scenarios
Humbray Company is a professional company that produces and manages vodka in the United States. Its Smirnoff enjoys a high reputation in the vodka market, with a market share of 23%. In the 20s, another company came out with a new vodka that was as good as Humbray's Smirnoff for $60 a bottle less.

Facing price competition from rivals, according to the usual practice, Humbray has three options to choose from: reduce the price by $1 to keep its market share; maintain the original price and compete with competitors by increasing advertising and promotional expenses; Own market share decreased.

Whichever one of these strategies Humbray takes, it appears to be losing.However, after much deliberation, the company's marketers concocted a fourth, unexpected tactic, raising the price of Smirnoff by another dollar and launching a Swiss version of the same vodka as the competitor's new vodka. Saga and another bobo that is less expensive.In fact, the quality and cost of these three wines are almost the same.However, the implementation of this pricing strategy has enabled the company to reverse the unfavorable situation: on the one hand, it has improved the status of Smirnoff wine, making the competitor's new product a common brand; on the other hand, it does not affect the company's sales. Revenue, and due to the surge in sales, profits have increased significantly.

Question: How does Humbray set effective product prices?
2. Role simulation
Suppose you are the general manager of a leading company in the automobile industry, and you have recently developed a new technology and you have absolute control over the market. At this time, when resetting the price, should you set the highest price that can obtain profits, or set the price for consumers? What is an acceptable price?
3. Thinking Enlightenment
In addition to what is covered in this section, what other aspects do you think need to be considered when setting prices?

4. Physical training games
Props: some paper, some pens.

Number of participants: 12 people.

Method: 12 people were divided into 3 groups, namely Group A, B and C, with 4 people in each group.Set up a specific scenario, 3 groups set prices for a certain product respectively, and write down the basis.

Rules: The time is 15 minutes, which group wins with the most reasonable and well-reasoned price within the specified time.

Purpose: Through the game, cultivate the ability and skills of game participants to set prices.

5. Improve plan
Reference answer

1. Scenario: Humbray adopts the drop pricing method, that is, raises the price of Smirnoff by another $1, and at the same time introduces a Reese that is the same as the competitor's new vodka and another lower price. Some pops.Defeated the opponent with three vodkas of different prices and similar quality.

2. Role simulation solution idea: Only products with a price that meets the consumer support ability can occupy the market.

3. Thinking enlightenment and answering ideas: price planning should be surprising, and only when it is implemented can it be preemptive and achieve the goal.The price strategy should also be changed in a timely manner. Relatively stable prices are the basic principles of business operations. If the frequency of changes is too fast, it is easy to lose the trust of consumers.However, relative stability does not mean that it cannot be changed. As long as the timing is right, the price factor can still be used to directly profit or achieve the purpose of repelling competitors.Price planning must ensure range adaptability. Enterprise pricing should be limited by upper and lower limits. Price changes should be within the range specified by the upper and lower limits. Breaking through this range may bring side effects to the company.

Classic look back
In 2003, the price increase of some McDonald’s food was widely circulated in the industry. Beijing McDonald’s stated at that time that the price increase was only to adjust the price of some products “to respond to the market environment, maintain a competitive advantage and develop steadily”, and the overall menu price was average. The increase is only 1% to 2%.

In response to some media's speculation, a relevant person from Beijing McDonald's told reporters: McDonald's price increase is an established strategy of McDonald's in the Chinese market, and it is related to changes in the Chinese market.After investigation, McDonald's found that: China's economy is developing rapidly, people's living standards are improving, and the average salary of employees is also increasing by double digits year by year. Customers are also putting forward new requirements for dining environment and higher product quality.To this end, McDonald's can make choices according to its own situation. Of course, "price increase is one of the strategies."

In 2003, McDonald's national price adjustment was the same as its global shrinking business strategy, which was to increase the operating income of a single store to ensure the speed of development, so it was inevitable to adjust the price of some products.In the fourth fiscal quarter of last year, McDonald's announced its loss for the first time in 47 years. On November 11 of the same year, it announced the closure of 8 fast food restaurants around the world. At the same time, it withdrew from 175 countries in the Middle East and Latin America. "Enclosure" projects in 3 countries, while cutting 4 to 400 jobs.

McDonald's also stated that the company has about 3 McDonald's fast food restaurants around the world, and the scale is too large. The company can no longer maintain a growth rate of 10% to 15% in earnings per share.

It is not difficult to see from the case of McDonald's price increase: a company's price increase behavior is closely related to internal and external factors of the company.At the same time, the normal price increase of enterprise products is also a normal market behavior.

Skillful touch
There is a saying in the market that "it is easy to lower the price and difficult to increase the price", which means that if the product price increase is unsuccessful, it will not only fail to increase profits, but will also affect consumers' loyalty to the brand.Therefore, at the beginning of the product launch, the company's product pricing should be "high rather than low"!This requires companies to have sufficient and accurate forecasts of future market development trends and price changes. As long as they have an accurate price positioning at the beginning, they will avoid price wars with similar products in the end.

From the analysis of the factors that affect the price increase of products, the fluctuation of product prices is mainly caused by internal and external environmental factors.From the perspective of internal factors, it is mainly the increase in production costs, operating costs and other costs that lead to product price increases; while the external environment is due to changes in raw materials, transportation, taxes and competitors, which lead to price increases of enterprise products.From a certain point of view, these two factors seem to be effective reasons for the price increase of enterprise products.But in essence, consumers may not necessarily buy it!Therefore, the reason and timing of the price increase must be appropriate.In a word, consumers must be given a reason they understand and can afford.

thinking innovation
The price increase cannot ignore the timing.Some companies take advantage of the momentum to raise prices once their products sell well in a certain market, which in turn affects the reputation of the brand; at the same time, it also gives "homogeneous competitive brands" an excellent opportunity to compete for customers.

To face the wave of rising prices with a sober and calm mind, don't blindly follow the trend!If the opponent's price increase has exceeded the economic level of the target market and the consumption power of the target group, then there is no need for you to follow.In the process of following the price increase, it is necessary to combine factors such as product performance, packaging and brand influence with competitors' product prices to pull up the grade.Otherwise, you will be close to failure.

Practical points
1. If your brand is only a local or regional brand, not a nationally famous brand!Then your price increase should not be too long, you must adjust the price curve appropriately, otherwise, it will affect consumers' loyalty to the brand.

2. If your product still has a reasonable profit margin, even if it is slightly lower than before, you can stand still, and it will not be too late to increase the price in combination with product upgrades in the future.

3. Remember that "you go up and I go down" is not the best strategy!For the price increase of the leading brand in the industry, you may be able to lower the price on the contrary, but if it is your number one competitor brand, blindly "comparing lower" will only lead to disorder and disorder in the market competition.

4. The price strategy of the enterprise should be based on the new needs and consumption levels of consumers, and should not be affected by temporary market trends.In view of the market competition environment, in addition to formulating a reasonable profit gradient, it is also necessary to consider and analyze the future changing trend of the market, so as to be able to prevent and attack well.

Scene reconstruction
1. Scenarios
At the beginning of 2006, KFC raised the prices of some products, and KFC's 1200 stores in China simultaneously implemented the price increase strategy.The price of some products in the KFC product list, including chicken rolls and finger-licking chicken, has risen slightly since the New Year, ranging from 0.5 yuan to 1 yuan.This is KFC's second price adjustment in China after the price increase at the end of 2004.

It is understood that the products adjusted this time are not the same as the last time.As for the reasons for the price increase, Shanghai KFC said that it was mainly caused by the following factors.First of all, driven by the sharp rise in demand, the prices of catering raw materials have increased significantly.Secondly, the labor cost in the labor market has risen, and various costs such as other rent costs, water and electricity charges have also risen to varying degrees.

KFC has formed a fixed consumer group and brand loyalty, and the price increase of several food products this time is relatively small, and the impact on the dining crowd is not too great.

Question: Is the reason why KFC's price increase did not have much impact on the diners just because of the relatively high brand loyalty?

2. Role simulation
If you are the boss of a start-up company in the food industry, it is imperative to increase prices in the face of rising costs. In the absence of brand loyalty, how can you reduce the impact of product price increases on customers?
3. Thinking Enlightenment
When the price of a company's products increases, besides the content mentioned in this section, what other aspects do you think need to be paid attention to?
4. Physical training games
Props: some paper, some pens, some small commodities (such as mineral water, fruit juice, etc.).

Number of participants: 9 people.

Method: 9 people were divided into 3 groups, 3 people in each group.Set up a specific scenario, and the three groups formulate a price increase strategy for a specified commodity, and write out a reasonable basis.

Rules: The time is 30 minutes, whichever group formulates the most complete and reasonable price increase strategy within the specified time will win.

Purpose: Through the game, cultivate the ability of game participants to plan a reasonable price increase strategy.

5. Improve plan
Reference answer

1. Situational case: No.The reasonable behavior of KFC's price increase has been recognized by the society.

2. Role simulation solution ideas: Let customers fully understand the rationality of price increases.

(End of this chapter)