58 innovative plans for marketing

Chapter 13 Price Planning (3)
It is also worth explaining that if the price must be lowered under unavoidable circumstances, one of the principles to abide by is that the price reduction must be done in one step, and the price must not continue to drop.One of the basic mentality of consumers is to buy up and not buy down.After several days of price cuts, consumers can't help but wait for you to buy at a lower price, instead of scrambling to buy.If this is the case, the plan to promote sales through price reductions will be completely defeated.

Classic look back
From the launch of Procter & Gamble's 9.9 yuan "New Rejoice", to the end of 2006, the promotional advertisement of Rejoice essence hair conditioner with 7.3% off and "Pantene" hair care essence with a 19% price reduction was broadcast on CCTV, local satellite TV, and local TV stations. The bombardment during the prime time marks that Procter & Gamble has fallen into the quagmire of price wars in the shampoo and hair care industries.

Why did the "godfather of the industry", who has been holding his head high and has been the industry's sales champion for many years, launch such a massive price war?

In the Chinese market, Procter & Gamble, which has been making great strides by virtue of its multi-brand strategy and advertising bombing, has begun to look a little dignified in the face of the crazy siege and encroachment of well-known and unknown brands: P&G’s brand influence has also been severely affected in the primary market. The test, mid-to-high-end consumer groups are scattered and lost to "strong competing products and disruptive competitive brands" at an alarming rate; in the secondary and tertiary markets, it is even more powerless, and it is difficult to balance the beginning and the end.Following Procter & Gamble's "Runyan" shampoo to withdraw from the market sadly, in July 2006, the refreshing shower gel, which was only available for two years, also announced its complete withdrawal from the Chinese market.Calculating carefully, except for the few brands launched by Procter & Gamble when it first entered China, all the new brands that Procter & Gamble has launched in recent years have all suffered blows. Either they failed to achieve the expected goals, or they did not have enough impact on the market, or they simply disappeared. .This series of failures broke the "myth" of Procter & Gamble, and the status of "the godfather of the industry" exists in name only.

If it cannot get rid of this situation and regain its glory, a "crisis of confidence" will inevitably erupt at the levels of internal employees, partners, consumers, etc. Therefore, P&G is bound to fight to the death.

From the case of Procter & Gamble, it can be seen that a price war between a company and its opponents is often caused by external objective situations.Of course, it cannot be ruled out that the subjective factors of the enterprise are at work.

Skillful touch
Price war is a sharp "double-edged sword", which can hurt others as well as oneself; "Seal the throat", thereby forcing the opponent to a corner, and even directly putting the competitor to death.This is the "kill without blood" price war.

When it comes to price wars, many people often have misunderstandings. When it comes to price wars, they think it is a price fight in their consciousness. When it comes to how to fight prices and what goals to achieve through price wars, many people "know it, but Don't know why."Therefore, in order to better use price wars to serve the market and enterprises, it is necessary to eliminate one-sided understanding and understanding of price wars, so as to establish a reasonable and scientific evaluation system for evaluating price wars.

thinking innovation
As one of the most primitive marketing strategies, price war is generally favored and adopted by the majority of manufacturers because of its strong lethality, short-term flatness and many other advantages. Looking at China's consumer goods industry, especially the convenience food industry, all well-known enterprises at present : From the first-tier brand Master Kong to Uni-President, the second-tier brand Hualong to Third Prince, etc., almost all of them were "followed up" or "fighted" by price wars. , and move towards the pinnacle of the industry and career together.

Price war is a market "tool". As a "tool", there is no distinction between good and bad. The results and effects produced by different manufacturers and different purposes are completely different or even quite different.But what is a good price war and what is a bad price war?Generally speaking, any price war that is conducive to environmental purification, industry development, corporate competition, and strategic realization to achieve a win-win situation is a good price war.On the contrary, those price wars that are dumped at low prices, opportunistic, disrupt market order, and have no strategic significance are bad price wars.

Practical points
As a marketing strategy, the price war has a relatively single strategic goal, that is, to achieve the real realization of the enterprise's strategic deployment through "hands-on-hand combat" on prices.Let's discuss how to win the price war.

1. Win an aggressive price war.From an enterprise's point of view, offensive price wars are often based on the company's strategic considerations, for example, to meet the needs of competition in the entire industry, or to achieve rapid growth for the enterprise itself, so that the enterprise can achieve scale effect, so as to better participate The needs of market competition, most of this tactic can be adopted.Offensive price wars are a kind of market attack behavior actively adopted by enterprises. Most of these price wars take strategic products as the "pioneer" and follow up strategic products in time. Some manufacturers even achieve large-scale coverage of the market. , Implement bundled sales or limited shipments to achieve the strategic development goals of the enterprise.

2. Win the sniper price war.The sniping price war is a market behavior between the offensive and defensive types adopted by enterprises. It is a "surprise" action taken by enterprises to better segment and segment the market.To fight a sniper-style price war, we must pay attention to the following points: we must choose the right "target", and only when we have a target can we take action, and the "target" is often a new brand entering the market or a major local competitive brand; If you want to hit it right away, you can't just scratch the surface, try it out, or give up halfway; the products that enter the market must occupy the other party's market area and grab market share through sniping.

3. Win defensive price wars.Defensive price wars are generally a kind of market defense behavior that companies have to take as a last resort. When a "strong enemy" invades their territory, companies often adopt this defensive price war in order to preserve the market.When adopting a defensive price war, the following points should be paid attention to: the products participating in the price war must have a focus, and the corresponding products should be selected according to the main specifications of competing products to participate in the price war, and the whole line cannot be involved; the "participating" products should try to use new products, Because after the price war, this kind of "cannon fodder" products often no longer have reserved value; try to perfectly combine defense and offense, reflect the offensive element in defense, and take the opportunity to expand market share in order to "kill more birds with one stone".

Scene reconstruction
1. Scenarios
In the 11 years since it entered China, Wal-Mart, which always advertises "everyday parity", has never participated in the price war of Chinese supermarkets.But this time, Wal-Mart has launched a large-scale price discount policy without hesitation.

Starting from July 2007, 7, 5 Wal-Mart shopping malls and community stores across the country jointly launched more than 80 kinds of special offers.The company also specially designed "Special Deals" in-store signage featuring Walmart's iconic smiley face.Almost on the same day, Wal-Mart China confirmed that Chief Operating Officer Yu Jianyi and Vice President of Corporate Affairs Li Chengjie had left Wal-Mart and no longer held any positions in Wal-Mart, and Chen Yaochang took over the relevant affairs.

For Chen Yaochang, who has just assumed his new post for four months, what needs to be solved is far more than just local adjustments such as personnel changes and price adjustments.How to solve the commercial dilemma that Wal-Mart China is facing with partial profits and overall losses is the top priority.

This is the first time that Wal-Mart has participated in a price war since it entered the Chinese market, which also shows that its strategy of "everyday parity" is changing to "everyday low price".Although the "lower price" strategy launched by Wal-Mart this time is a major change for itself, in the eyes of many retail companies, it has long been a usual marketing method.This is also an important reason why Wal-Mart, which has always been proud of its "every day parity", has encountered localization problems in the Chinese market.

Stimulated by local merchants such as Wumart who often launch large-scale discounts, gift giving and other promotional activities, Wal-Mart, which adheres to the "everyday parity" policy, cannot win the favor of consumers in the Chinese market.Industry insiders emphasize that Wal-Mart's price war heralds the beginning of its new "localization" policy.

Question: Why did Wal-Mart start a price war?

2. Role simulation
If you are the CEO of a well-known home appliance manufacturer, facing the current fierce price war, how do you lead the company to win?
3. Thinking Enlightenment
In the actual market operation, most manufacturers sometimes encounter the phenomenon of "fighting" within themselves or their own distributors, for example, price wars started by branches all over the country, price wars provoked by distribution channel distributors, And price wars waged by retailers themselves, and so on.At this time, what should the enterprise do?
4. Physical training games
Props: some paper, some pens.

Number of participants: more than 6 people.

Method: Take 6 people as an example, divide them into 3 groups, 2 people in each group.Set up a specific scene, and 3 teams will engage in a price war on a specified product.

Rules: The time is 30 minutes, and each group must make a reasonable and feasible plan for the price war.Which group finishes quickly and well within the specified time, which group wins.

Purpose: Through the game, cultivate the ability of game participants to plan and fight price wars.

5. Improve plan
Reference answer

1. Scenario case: Adapting to the needs of the development of the situation and realizing localization may be the main reason why Wal-Mart started the price war.

2. Role simulation solution idea: first defend, then attack.

3. Thinking enlightenment and answering ideas: For these internal disputes that both cause manufacturers headaches but cannot be ignored, manufacturers must take practical and feasible measures to deal with these price disputes that may lead to future troubles if they are not careful.As for the price war provoked by the branch, as a manufacturer, it is necessary to strengthen its wrists, strictly discipline, deal with it decisively with the attitude of "killing chickens to scare monkeys", and punish the relevant parties to reverse the unfavorable situation.For the price war started by channel distributors, manufacturers must attack with an iron fist, and use the relevant regulations on regional protection to cancel their rebates, promotions and other related policy support, and even cancel their distribution qualifications.As for the price war initiated by retailers, due to its short duration and small scope, manufacturers should guide them reasonably and understand their interests so that they can develop in a direction that is beneficial to the company.

(End of this chapter)