Archive for the ‘Economic crisis’ Category
During the deep financial crisis we are experiencing now, your company must deviate from the usual marketing mix to make several adjustments. His most likely competitors to lower their prices because customers have less purchasing power due to job losses.
Your company will either have to lower their prices or add some additional values to the price: as free delivery, guarantees, etc. In general, it is necessary to lower prices or adds items that are simpler and less expensive, even if these items somehow cannibalize their higher priced items.
Unfortunately, most companies respond to global turmoil and the crisis by slashing costs, sometimes indiscriminately, in the process causing damage to the reputation of quality or service they have created. If you have to cut costs, the company must first reduce the fat (which is any company in normal times), and then decide which market segments, geographies, products and services that never amounted to much or do they have a promising prospect. These are the ones who can cut.
Those companies that have taken stock of the opportunities created by global turbulence are in the best position to improve its performance over the long term. It is well known that the Chinese use the same written character in the sense of crisis and opportunity.
We can not say that radical innovation is the only way forward. First, companies facing difficult times often do not have radical innovations in its development pipeline. Even if they wanted to conceive, it would take years to implement. Even if radical, just work better if it were a disruptive innovation that takes away a good percentage of business the current leader.
The global marketing battle, no doubt, will intensify in 2011, and the most obvious result will be price wars. If firms within an industry were wise, they all maintain the price line, except to acknowledge the differences in quality and brand strength. However, it only takes an aggressive competitor to lower the price enough to bring customers to their arena, nearly forcing competitors to cut prices.
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