Why Is High Performance Price Ratio A Nightmare For New ...

The decision-making process of high performance price ratio can be divided into two situations: selecting quality at low price (low quality), ... WorldClothingShoesandHatsNetwork Signin Signup 한국어   日本語   Français   English   中文     Home> WhyIsHighPerformancePriceRatioANightmareForNewBrands? 2019/12/2320:24:000 한국어  日本語  Français  English  中文 CostPerformance In2019,thenewwaveofconsumptionwaswashedup.Thehighcostperformancehasbecomethe"King'sway"ofthenewconsumerindustry.Manynewbrandsarethrilled.Butthisyear'sdouble11electricitysupplierdatashowthatthesalesvolumeofeachcategoryisalmostTop10traditionalbrand.Thenewbrandofindividualbreakoutisyettobeobserved.Theso-calledhighcostperformanceanddebrandingseembeautiful,butatleastsofar,theyhavenotshowntheexpectedresults.Itisstillquestionablewhetherthehighperformancepriceratioisthenewbrand's"kinglyway".Butitcanbeconcludedthatmostnewbrandswilldieinthedreamofhighcostperformance.1,"lowquality"or"highquality-lowprice".Ahighvaluepricebrandisusuallybasedonapremisethatconsumersarewillingtospendlessmoneyonbetterproducts.Butthisassumptioncanonlyrepresenttheresultsofconsumers'expectations,butcannotreflecttheprocessofconsumerdecisionmaking.Thedecision-makingprocessofhighperformancepriceratiocanbedividedintotwosituations:selectingqualityatlowprice(lowquality),andselectinglowquality(highqualitylowprice)inquality.RecallusingTaobao,JingdongandothershoppingAPPexperience,sometimesyouwillfirstsortaccordingtolowpricesandthenchooseproducts,thatis,choosequalityatlowprices;sometimesyouwillsetthequalitystandardfirstandthencomparetheprice,thatistochoosealowpriceinquality.Inthesetwodifferentlogicdecisions,youcanchoose"cost-effective"products,butthepriceandqualityofthetwoareusuallynotinasinglegrade.Inotherwords,"lowquality"and"highqualitylowprice"representtwodifferentconsumptionneeds,oreventwotypesofconsumergroups.Costcoisavividcase.Intheearlydays,alargenumberofmerchantssoldtailcargoandcleanedupinventory.Inthelowprice,"pickuptheleak"(HuaXiaoqianboughtthegoods)becamethefirstimpressionofusers.Later,socialcrackingbecameanewengineofgrowth.PenguinZhicool"MultiUserResearchReport"showsthatalargenumberofusershave58.8%fromthreeorfourcitiesandbelow.Choosingqualityatlowpriceisthemainconsumerdemandformanyusers.UnlikeCostco,whichisfamousforits"membershipwarehousereserves",itreliesonasmallnumberofselectedSKUtocompensateforthelowprofitmarginbycollectingmembershipfees.Costcousersaremostlymiddle-classfamilies.Thepremiseofchoosinglowpricesistoprotectqualityandsaveenergy.Therefore,choosinglowpriceinqualityisthedecisionlogicofCostcousers.Theconsumptionlogicbehindthehighperformancepriceratioiscompletelydifferent,sousers'purchasingpower,consumptionpreference,businessmodeandcommunicationfocusofenterpriseswillbedifferent.2,highperformancepriceratioand"cheapgoods"areonlyseparatedbyawall.Consumerspreferhighcostperformanceproducts,notbecauseproductsarecheap,butrather"cheap".Consumersfeelthattheyearn4000yuantobuyiPhone11,whilebuyingahighcostperformanceShanzhaithousandmachinewilllose.Consumersliketo"takeadvantage"becausetheyarescarceenough.Iftherearehighcostperformanceproductseverywhere,consumerswilllosethecontrastofotherbrandsandenjoythepleasureof"cheap".Atthispoint,yourbrand'shighcostperformancewillloseitsfootholdandbecomeapure"cheapgoods".Tobuildacost-effectivebrand,youhavetobuildcompetitivebarriersthatsupporthighcostperformance.Generallyspeaking,highperformancepriceratiocanberealizedinthreeways:Wemuststrictlycontroltheoperatingcosts,lowerthepricesofrawmaterials,andcutdownmanagementexpenditure.Usingscaleeffect,massproductionandlowmarginalcost;Masterthetechnicaladvantages,increaseproductionefficiency,andraisedailyoutputfrom10thousandto20thousand.Thecompetitionbarriersofthethreeincreaseonebyone,andthedifficultyofimplementationgraduallyincreases.Butevenifyoubuildupacompetitivebarrier,thehighcostperformancestillhasinherentdisadvantages.(1)itisdifficulttoraisecostsbyraisingprices.Highcostperformancedependsoncostcontrol.Oncetheupstreamsupplychaincostsrise,theoriginalrelativelowpricewillbechallengeduntilthecostbreaksthroughtheprofitmarginsandprofitsturnintolosses.Ifthebrandwantstoincreaseitsprice,itwillbreaktheconsumer'sexpectationofthebrandandloseitsbrandcredit.Onthecontrary,thosewithmoreprofitmarginswillnotbeaffected.The2019annualreportofChina'sfastmovingconsumergoodsindustrypointsoutthatduetotheincreaseofpackagingmaterials,logisticscosts,environmentalcostsandlaborcosts,fastsellingenterprisesaregenerallyfacingthepressureofrisingcosts.InJanuary2019,traditionalbrandssuchasMoutai,WuliangyeandHengShunwentupinprice.Howshouldthevastmajorityofnewbrandsthatlackpremiumcomethroughthedifficulties?(2)Limitedprofitmarginsresultinlackofflexibilityinsalespromotion.Discountpromotion,asacommunicationsignal,cannotonlyimprovesalesvolumeinashorttime,cleanupinventory,quicklyseizethemarket,butalsocandrainthemarketingactivities.However,thelowprofitmarginsofcost-effectivebrandswillresultinlimiteddiscountspace,therebyaffectingtheattractivenessofpromotionalactivities.TmallandJingdongonceissuedadiscountrequirementforcompulsorymerchantsto"breakthebaseprice".LiJiaqiliveinthesamebrandbecauseofservices,butlessthanVica5yuancoupons,calledfansallreturnbadcomment.Whetherthe618,double11ShoppingFestival,orlivegoods,discounthasbecomea"compulsorycourse"forsaleandsales.Ifyourbranddoesnothaveenoughpremiumtosupportdiscountsales,itiseasytosacrificebloodinthebattleofpricefixing.(3)weakeningthebrandeffectbycostperformanceratioHighcostperformancewillguideusers'decisionstofocusonbasicpriceandfunctionalutility,thusignoringotherbrandvalues.Consumersonlywantto"takeadvantage".Oncethecompetitivebrandofferscheaperproducts,theseuserswilllose.Andthebranditselfishardtodriveconsumerstobuy.Asafunctionalvalueconsideration,priceperformanceratioismorelikelytobecomeadirecttargetofcompetitionbrandthanemotionalandspiritualvalue.Oncethebrandcreditofhighperformancepricegoesbankrupt,thebrandeffectwillcollapse.Milletmobilephoneisknownforitshighperformancepriceratio.Butinthepasttwoyears,asthenuts,360,Meizu,evenHUAWEI,gloryandOVcontinuetodeepentheircostperformance,thepriceadvantageofXiaomimobilephoneisgettingweakerandweaker.AccordingtothelatestquarterlyreportonmobilephonesalesreleasedbyInternationalDataCorporation(IDC),domesticshipmentsofmilletmobilephonesinthethirdquarterof2019decreasedby30.5%comparedwiththesameperiodlastyear.Thisdownwardtrendactuallyappearedveryearly.Besides,thehighperformancepriceratioistheproductionofconscienceinsomeusers'eyes,andinotherusers'eyesisthepronounoflow.SoHUAWEImobilewilldirectlyenterthehigh-endmarket,againsttheinherentdisadvantageofmillethighcostperformanceadvantage-feelinglow.Therefore,thefourmajorbrandsofmilletcarryoutstrategicreorganization,tryingtochangethisbrandimageandcompetitionpattern.Milletispushingthemiddleandhighend,redriceispushingthelowend,theblacksharkpushesthegame,andtheUSispushingthewomen.PeterTill's"from0to1"mentionedthatenterprisecompetitionmustpursuemonopolyandavoidcompetition,soastoconcentrateongreaterinnovation.Ifabrandwandersatalowpriceandlacksahigherdimensionalbrandvalue,itwillloseitspricingpowerandfallintothelow-levelcompetitionofpricewar.Theothersideofpursuinghighperformancepriceratiomaybelackofinnovation.3,fourtypesofbusinessdrivenbyhighcostperformanceratio.Generallyspeaking,highcostperformanceismoresuitableforthesefourbusinesses:retailers,channeldominantbrands,marginalbusinessesanddrainagebusiness.(1)retailersCostperformanceisaveryimportantcompetitivestandardintheretailindustry,whichisverydifferentfromtheconsumergoodsindustry.Oneofthereasonswhybrandscangeneratepremiumisthatmaturebrandsprovideatoolvaluethatcanbequicklyidentifiedbyconsumersandaccumulatecreditinthemindsofconsumers,savingtimeandenergyinselectinggoods.Forexample,ifyougotothesupermarkettobuycosmetics,youmaypickupL'OREALdirectly,butifyouencounterunfamiliarandunidentifiedbrands,youwilltakethepackagingandpickupwords,andcompetealongtheshelvesforfearofbeingpits.Retailersusuallydonothavetheirownproducts,butareresponsibleforselectingbrandgoods.Toacertainextent,thevalueofthetoolthatisoriginallychosenbythebrandtochooseandaccumulatecreditisreplacedbytheretailer.Thepremiumofthecorrespondingpartofthebrandistransferredtotheretailer.Thesamequalityandlowerpricegraduallybecometheembodimentofretailer'sexistencevalueandcompetitiveadvantage.LiJiaqicansellbrandedgoodstoamuchlowerprice,becauseLiJiaqihasreplacedthispartofthebrandbymeansofactivescreeningandevenpersonalcreditendorsement.(2)channeldominantbrandConsumerbrandsadoptcost-effectivestrategies,usuallyconsideringsmallprofitsbutquickturnover.Havingasounddistributionchannelisacompetitivebarriertosupportthisstrategy.Channeladvantagesarereflectedinthewidedistributionofchannelnetworksandthehighefficiencyofproductturnover.Thisisconsistentwiththecompoundinteresteffect.Wahahacreatedahugeandstablechannelnetworkthroughjointsales,whichcanbeusedforlarge-scaleanddensedistribution,increasingtheresponsespeedofgoodsdistribution,andusinghighcostperformanceasasalessupportpoint,leveragingtheleverageof"smallprofitsbutquickturnover"todigesttheseproductsintheshortterm.(3)marginalbusinessWhenbrandcorebusinessestablishesbrandeffect,profitsfromperipheralproductscanbeharvestedthroughbrandextension.Thesemarginalbusinessesusuallylackdifferentiation,buttheycanmakefulluseofbrandvalueandtrafficthroughcost-effectivemode.Mosttypical,basedonitsownuserandbrandtraffic,Xiaomihasintroducedperipheralelectronicproductsandsocks,towels,toothbrushesandotherconsumables.(4)drainagebusinessTheproductmixofpopularbusinessexplosion,drainageandprofit.Amongthem,drainmoneyisahighcostperformancemodel,sometimesaslightloss,butcanpromotedrainageforotherproducts.SummaryofthisissueWhenyouwanttobuildacost-effectivebrand,youneedtobeclearaboutyourtargetconsumers,whetheryouchoosequalityatlowpricesorlowquality.Andthenachievehighcostperformancethroughthesethreeways:Wemuststrictlycontroltheoperatingcosts,lowerthepricesofrawmaterials,andcutdownmanagementexpenditure.Usingscaleeffect,massproductionandlowmarginalcost;Masterthetechnicaladvantages,increaseproductionefficiency,andraisedailyoutputfrom10thousandto20thousand.Ofcourse,ifyouarearetailerorchanneldominantbrand,highperformancepriceratioisthekeytobrandmarketingdesignandindustrialchainintegration.Butifyouarenot,youmightaswellreturntovaluemarketingandgaingreaterpotentialfrombrandequity.Thedreamofhighcostperformanceisgood,butitisnormalforthecommoditymarketto"dividethemoneyonebyone".Source:titaniummediaAuthor:ZhengGuangtaoGrant 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