It never hurts to have a price advantage, but relying on being the cheapest can be a risky strategy.
Take an importer I know who has let price drive their entire sales plan. It has been a real shock for them to discover that brand values and consumer loyalty are vital for long term key account relationships and not just empty buzz words. When volumes started dropping, and sales minimums were not being met, questions started to be asked. What was going wrong?
The word from the buyer came loud and clear; there needed to be an investment in marketing. And the truth is, if you don't believe in your brand, why should your key accounts or your consumers. An in-store visit witnessed customer after customer ignoring their product and choosing a well known brand name that was up to three times more expensive. In some cases the brand name is inferior both in performance and features.
Time to act. The first step is to realise that, as ruthless as they are, most stores want to support their stocked products, especially if they are exclusive. But it is a waste for them to give catalogue or advertising support to a product that is likely to disappear overnight. So for them to commit to you, you need to commit to your brand.
Armed with a draft marketing plan, our importer could re-negotiate the volumes and find the budget to make some quick wins. We helped them identify their point of difference and what was special about their product. Then they started to reach out to their consumers. There is a lot of work ahead but at least they are not going back with even cheaper prices.
Andrew Wylie is the director of Pandemonium, strategic thinkers in marketing, sales and creative
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