The natural reaction for most companies is to lower prices when a competitor cuts prices or discount. This is a vicious circle where all parties fight a war to “race to the bottom” - even the winner loses. We all know the proverbial "Four P's in Marketing" so when one P (Pricing) is under pressure, consider changing the customer perceptions of price by exploiting Product, Promotion and Placement.
Develop a Fighting Brand. Wikipedia Definition: In marketing, a fighter brand (sometimes called a fighting brand) is a lower priced offering launched by a company to take on, and ideally take out, specific competitors that are attempting to under-price them. Unlike traditional brands that are designed with target consumers in mind, fighter brands are created specifically to combat a competitor that is threatening to take market share away from a company's main brand.
The challenge is to make the fighting brand just “good enough” to beat the low-priced rivals but not so good to cannibalize your premium brand’s market share or profit margins.
Improve Your Product (Better Customer Value Proposition)
This may be by product enhancements, services, knowledge, or bundling. Have a better understanding of the customer so that you can understand the “pain points” and better sell your differentiation. Work with 3rd parties to complement your product and grow your ecosystem.
Promotion can move the focus from price to brand, image, and competitive differentiation.
Expand and go for niches. Work with key buying influencers. For example, certain committees or associations may decide on industry standards - you want to ensure that your products meet those requirements and possibly get mentioned as a source. Try to form partnerships with distributors or supplies. A large global organization may find it more efficient to deal exclusively with one supplier. Go for niches where you can leverage your market and application knowledge. Work with 3rd parties to complement your product and grow your ecosystem.
In Marketing and Product Management, you always build on the four P's and can sometimes compensate for a weaker P with the other 3 P's. In other words, watch where and how much you are "P'ing".
“Stop crying or I’ll really give you something to cry about!”
How many times have I had to pause when my mother was punishing me and saying those words simultaneously? Okay, let me get this straight – I am crying because you are whupping me but you want me to stop crying or you will hit me some more?
Little did I know that I was being introduced to the "Stroop effect" at an early age (and re-introduced for many more years to come)...
The Stroop effect is well-known in psychology and describes an experiment about the time it takes to name the color of printed words. When asked to say the incompatible ink colors in which a list of color words is printed (e.g., to say "blue" in response to the word "yellow" printed in blue ink, "red" in response to the word "green" printed in red ink, and so on), people have a temporary mental block and can't do it quickly. However, when asked simply to read the same list of words (e.g., "yellow" in response to the word "yellow" printed in blue ink, etc.), people fly right through the task.
In most cases, you should have a difficult time with the Stroop experiment above because part of your brain is fixed on the text colors while you are trying to focus on the words. You don’t usually expect things to be so disjointed.
Why should you care about the Stroop effect?
The Stroop effect is really about removing distractions and having consistency to enable efficient completion of tasks. Cut down on all the “noise” that gets in the way of a clear message. It also points to our selective attention, our conditioned processing (for words vs. colors, etc.), mental preference for congruence, and struggle to filter out noise in thinking and working.
As a manager or communicator, your message must match your actions and behavior. Is it “Do as I say, not as I do?” Remember the old joke, “Beatings will continue until morale improves”? It’s difficult for people to do what is asked when they see a conflict in reality.
In product design, pay attention to color, fonts, and graphics. For example, people love to use icons. It’s modern, compact, and saves on translations. Ensure that it truly is universal and easy to understand. For example, we still use a disk graphic to represent “Save” yet an increasing number of adults have never seen a floppy disk. In some cases, text accompanying icons, via hover help or an actual label, may be more user-friendly and efficient.
Your Brand is also subject to the Stroop effect. Ensure that all customer “touch points” when interacting with you, e.g. design, customer communication, collateral, service, etc. are all consistent with the message that you want to convey.
In Marketing, the Stroop effect implies that people are conditioned to respond more to concepts and words that draw them in mentally and emotionally (versus a product). You can see in the Stroop experiment the power of color.
So keep the Stroop effect in mind in all that you do or convey...otherwise, you might just get the opposite of what you want!
One of the most profound ways of thinking about and shaping your reality is to consider your life to be a story (or movie). It can be a melodrama, comedy, tragedy, or any combinations and the most amazing thing is – you are the author of your own story.
I grew up on the Lower East Side of NYC and attended the local elementary and junior high school. All my classmates were basically of the same background: poor and had parents who never had an education. A good number of us went onto to productive lives, went to college, got jobs, raised families, etc. A few, unfortunately, went to prison. There were no common denominators that decided who would “succeed” or “fail”. What was different? Unknown to us, we were each protagonists living our individual stories. Many of our stories had similar hardships and events but our reactions and attitudes led to different paths and outcomes. Some of us "stayed clean", studied and worked our way out. Others dropped out of school, turned to drugs, crime, and wrote a much different story.
Every story has a beginning, middle, and end. We can’t control the beginning (our birth and background) and the past is the past – as Rafiki said to Simba in the “The Lion King”: “You can either run from it, or... learn from it”. What we do have the power is to decide what the rest of the story will be and work to make it so. "Live in regret or longing for the past, or in a constant state of trying to protect yourself from future misfortune, you will miss the real and potentially amazing opportunities that are staring you right in the face, in the now" - (quote writer unknown).
There are 3 basic steps to writing your story:
1. Purpose – Decide on the purpose of your story, your reason for being*. You might refer to this as your mission statement.
2. Reflect – review your current story. Is it going the way that you want to achieve the “ending” that you want? Does your current story appear misaligned with what you want, e.g. you want to be there as your children grow up but yet you are neglecting your diet and health. Are you being consistent in your story? You can’t have your purpose as being a benevolent leader if you decide that you can be nice to some people and not others.
3. Rewrite – visualize and write down what your story will be. Create the new storyboard; take the steps needed to change the story to go in the direction that you want.
When you change your story, you change your life. Be bold; make it a great story!
*Note: Your purpose should not be “to be CEO of this division”, “to have a 6 figure salary “. You can, but it would be a very poor story. To quote Victor Frankl: "Again and again, I therefore admonish my students in Europe and America: Don't aim at success - the more you aim at it and make it a target, the more you are going to miss it. For success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side effect of one's personal dedication to a cause greater than oneself or as the by-product of one's surrender to a person other than oneself. Happiness must happen, and the same holds for success: you have to let it happen by not caring about it. I want you to listen to what your conscience commands you to do and go on to carry it out to the best of your knowledge. Then you will live to see that in the long-run - in the long-run, I say! - success will follow you precisely because you had forgotten to think about it."
Frank Lio is a Product Manager, Strategist, and Change Agent in the Hi-Tech industry. His growing track record of successes include creating 3 winning software products, leading nationwide seminars, and turning around a failing business unit. He is currently serving a dual role as Product Manager and Business Team Support Manager at Instron ITW.
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