July 10, 2009 by German Pineiro
Online Consumers - Marketing Consultant Germán Piñeiro's BlogGenerally, in times of crisis, the vast majority of individual and business consumers tend, as they say, to “tighten their belts.” This translates, among many other things, into consumers becoming more receptive to price and tending to reduce consumption or try to find the same product/service at a more reasonable price.
On the other hand, the big brands, distributors and companies in general start a price war in which the important thing is to sell at the expense of reducing profitability "whatever is necessary" to continue maintaining the sales volume of the business plan.
As a company, entering into price wars with the competition can be a big mistake. It is certainly the easiest thing to do and the one that will require the least strategic work, but in some cases it can be the mistake that kills the brand and with it the company.
A strategy for companies that enjoy a good reputation and do not want to "kill" a prestigious brand by launching low-cost products or the same products with "special discounts" is to create a second brand to sell all the products we need.
It would make no sense to work for 10 years positioning a brand and its products as “elitist” or “the best in their segment” and then destroy the brand in 2 years by advertising or promoting the products as “bargains”, “the cheapest”, etc. This creates a great deal of confusion among consumers. On the one hand, “loyal and regular customers” will feel cheated, as if the company has been making fun of them for years. On the other hand, the company would gain quite a few “bargain-seeking customers” who can contribute a significant volume of sales, but who are very volatile customers and will divide the profitability of the business among many integers, even making it unviable.
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So…
Are bargain hunters interesting?
Well, as a good Galician, I would answer that it depends. If your company's target audience is the pure and simple bargain-hunting customer, then yes, it will be interesting. If your company sets itself a conventional customer as its target customer, the bargain-hunting customer will not be profitable.
The life cycle of a customer is important for a company. Making the most of the life of a customer and the relationships with them is an art that the company must master to perfection.
Advertising - Marketing Consultant - Germán Piñeiro Germán Piñeiro's BlogIn the case of the bargain-hunting customer, they are generally customers who give a lot of trouble, ask a lot of questions, counter-offer, look, look again, go on and on and on and in the end they can say that they bought for a euro difference. They are customers who do not value after-sales service or other added values and as a general rule will not repeat their purchase.
Price as such cannot be a company's competitive advantage, as it is very difficult to make it sustainable over time. Therefore, it is advisable to differentiate yourself from the competition in another aspect and at the same time attract profitable customers.
Before entering into a price war, I recommend that you think twice, as it could be the end of your company. If you have stocks that need to be sold urgently, remember that you can always use other strategies and that there are currently specialists in selling stocks to bargain-hunting customers.
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