• The price is right!

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    Surely it’s not a branding issue, or could it be? The success and growth of toll manufacturing of products have mutated so much that branding is the game for consumer preference. But what if all the products are one and the same but the packaging, positioning, pricing and target markets differ? Is it true the suckers are the consuming public drawn by media and advertising money, with government regulators sitting back, condemning the practice as capitalism? But is this capitalism, intended to fool the people?

    Branding, as we promote it, is the consistent delivery of the brand promise, which generates integrity for the brand—in other words, it is the truth about any deliverable product or service. Yet, we are confronted with real issues in this industry such as a concerted effort to manipulate the consuming public through the use of marketing techniques.

    Of course when the price is right, the factor of affordability clears all other obstacles and paves the way for a purchase. When cheap Chinese products dominate a marketplace, one often wonders, is it the ‘made in China’ label that induces the purchase? Perhaps not—that may be farthest from the buyer’s mind, but what makes the product attractive, having come from China, is most likely its affordable price.

    This strategy is a marketing tool to capture market share. The strategy does not require profit, in fact one can strategize to lose money to gain market share. Does that make sense to you? Some two decades back, instead of spending on an advertising campaign to generate awareness for a restaurant I launched in Singapore, I strategized to offer a full buffet for a ridiculously low price. The place was swamped with diners for sure. I generated awareness and became the talk of the town. However, having to end the promo campaign and bringing them back to normal levels was most difficult after it created the perception that our prices were awfully cheap. In other words, the strategy was not sustainability. Why then, are cheap Chinese products able to sustain their drawing power? Are they continuously losing money and profit? The answer, obviously, is cheap labor. This uneven playing field marks the difference. But that is not sustainable, unless the government’s hold on the people is embedded in the law.

    As for branding, China is only beginning to comprehend the concept and is now moving to produce quality products at quality prices. In this case, the price is truly right. Affordability does not necessarily compliment quality. However, quality can be tapered to accommodate competition. This is when product positioning takes place and market segmentation is drawn. This is a specific pricing strategy for a niche market, which is what we see today with the mutation of products on the shelves.

    Product expansion need not mean the delivery of innovation other than the creation of new titles they call brands. Branding has become even more difficult with the shrewd marketers and advertisers around. And yes, it is all about fooling the consumer to induce a sale, any sale! Sad but this is capitalism.

    harry.tambuatco@superbrands.com

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