---
title: "Is Low Price Really the Best Marketing Strategy?"
description: "In 2016, low-priced electric vehicles were a hot trend in the market. While brand companies were busy strengthening their core competitiveness and consolidating their market positions, low-price brands seemed unstoppable in capturing market share, leaving brand companies struggling to protect their interests. Some thus argue that 'low price is the best marketing,' but is that really true? Low price is often seen as a lifeline for the desperate."
author: "New Distribution"
publisher: "New Distribution"
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published: "2016-11-03"
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# Is Low Price Really the Best Marketing Strategy?

> In 2016, low-priced electric vehicles were a hot trend in the market. While brand companies were busy strengthening their core competitiveness and consolidating their market positions, low-price brands seemed unstoppable in capturing market share, leaving brand companies struggling to protect their interests. Some thus argue that 'low price is the best marketing,' but is that really true? Low price is often seen as a lifeline for the desperate.

In 2016, low-priced electric vehicles were indeed a hot trend in the market. While brand companies were busy honing their internal strengths and consolidating their market positions, low-price brands seemed to be conquering the market with an unstoppable force, leaving brand companies struggling to defend their interests. Hence, some have proposed that 'low price is the best marketing,' but is that really the case?

**Low price is a lifeline for the desperate**

Once, a salesperson asked his boss: 'There's a small factory in the market with very low prices, making it hard to compete. What should we do?' The boss replied, 'If this factory is so formidable, why is it still a small factory while we are a large one?' In reality, low price often plays the role of a 'troublemaker' in the market, causing more harm than good. In confrontational competition, high prices are often disturbed by low prices, even to the point of fear, but low prices ultimately struggle to defeat high prices and often suffer a crushing defeat.

We often observe that the products with the lowest sales volume are also typically the ones with the lowest prices. Unless there is an absolute cost advantage or product structure advantage, low price is no longer a conventional competitive tactic but a strategic one. In conventional price competition, low price is often seen by experienced marketers as a 'lifeline' for the desperate, and it is often the last straw that breaks the camel's back.

**Low-price marketing has initial momentum but no staying power**

High price defeating low price is the norm in the market, while low price defeating high price is an exception. We often see that low price dictates that the core element of marketing can only be price, because low price cannot support other marketing activities. High price, on the other hand, allows for a rich variety of marketing activities, thanks to the policy space created by the price.

Many people understand that high price requires marketing activities to support it, while low price does not, because low price itself is proof. We often see that 'bare price' launches are basically failures. The so-called 'bare price' means the price is rock bottom, with no marketing budget beyond that. Products launched at bare prices, aside from possibly causing a stir in the distribution channel at the initial launch, rarely make an impact on consumers.

Consumer purchases must be based on their identification with the product. This identification stems from packaging, price, consumption experience, market promotion, brand communication, and so on. After a product is launched, aside from packaging and price, all other forms of identification require marketing support. Low-price marketing, by discarding all elements except packaging and price, essentially abandons the channels for further brand-consumer connection, resulting in a lack of momentum for brand development.

**Activity is the core of marketing**

Activity attracts consumer attention more than price. Low-priced products are often silent, while high-priced products are often active. In the terminal market, there is a peculiar phenomenon: best-selling products are often not the lowest-priced, nor the most well-known brands, but the most active ones in the market.

In the terminal market, there are numerous electric vehicle dealers and a wide variety of categories, with overall high brand recognition. Whoever is more active is more likely to attract consumer attention, and consumer attention is one of the key factors in purchase decisions. Therefore, brand activity is the core element of corporate marketing.

Top brands like Aima, Yadea, Xinri, Luyuan, Lima, and Tailg, as well as brand companies like Xindazhou and Jingyuan, even in an industry downturn, maintain or even increase their marketing investment to enhance their brand activity in the terminal market, laying the foundation for counter-trend growth.

Low-price marketing can be effective in the early stages of expansion, but it cannot sustain long-term brand development or build consumer reputation.

Therefore, 'low price is the best marketing' is merely a lie told by some profit-driven enterprises. For such brands and companies, I advise consumers and dealers to stay away.

**Xiaojia's Take:** 'Low price is a tactic, not a strategy.'

People often cite 'Miniso' as an example—using low prices to continuously encroach on the territory of department stores, electronics, cosmetics, and daily necessities shops. The reasons for a brand to exist in the market are essentially:

1. At the same or similar cost, you can deliver better functionality and experience than competitors, allowing you to command a sufficient brand premium, such as Muji;
2. At the same or similar functionality and experience, you can control lower costs, allowing you to wield the low-price club and redefine the market order, such as Miniso.

In today's era of upgraded consumer demand, materials are no longer scarce, and consumers hold the initiative in purchasing behavior—they have ample time and budget to bargain with companies. Regardless of which pricing model is used, all companies face the same challenge: how to better control the efficiency of the entire supply chain to create more leverage for brand market operations. Today's supply chain management is no longer limited to the inventory management of the production process. Market distribution channels, including the inventory management of terminal retail stores, and even more importantly, management data, are crucial. This is because it truly reflects consumer demand and the market service capability of the company/channel. Only with the support of efficient supply chain can a low-price tactic be viable in the market; otherwise, you're out of the game!

**Source: Sohu.com**

**Commentary Source: Sales Jia**


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