Once a salesperson asked his boss: "There is a small factory in the market with very low prices, hard to deal with. What should we do?" The boss replied: "Since this factory is so formidable, why has it always been a small factory while we are a big one?" Marketing has a basic rule: launching at a high price is difficult at first but easy later; launching at a low price is easy at first but difficult later. In reality, low prices often only play the role of a "troublemaker" in the market, failing to achieve much but causing plenty of harm. In confrontational competition, high prices are often disturbed by low prices, but low prices ultimately cannot defeat high prices and often suffer a crushing defeat. We often find that the worst-selling products in the market are usually also the lowest-priced ones. Unless there is an absolute cost advantage or product structure advantage, low price is no longer a conventional competitive means but a strategic one. In conventional price competition, low price is often seen by experienced marketers as the "lifeline" of the desperate, and it is often the last straw that breaks the camel's back. Price level is not purely a pricing issue but a core marketing issue. Marketing guru Kotler said: "You don't sell products through price; you sell price." A teacher said: "Selling is selling products through price; marketing is selling price through products." Price and the marketing activities that support it constitute the marketing system. Whether low or high price is actually the difference between selling and marketing. We often see that low price determines that the core element of marketing can only be price, because low price cannot support other marketing activities. High price determines that its marketing activities can be rich and diverse, which is determined by the policy space created by price. High price defeating low price is the norm in the market; low price defeating high price is an exception. Of course, strategic price wars during industrial consolidation are exceptions. Marketing is about selling price; only by learning to sell price can one understand the true essence of marketing. The public's "common sense" about price is precisely the misunderstanding from a professional marketing perspective. The Incompetence of Low Price Whatever the price, corresponding marketing activities are needed to prove the reasonableness and legitimacy of that price and to gain price recognition (whether it is worth the price). But this is precisely a misunderstanding held by many. Many people understand that high price needs 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 expenses beyond that. Products launched at "bare price" hardly have any impact on consumers except possibly causing a stir in the channel at the beginning. Consumer purchases must be based on their recognition of the product. This recognition stems from packaging, price, consumption experience (such as tasting, trial), market promotion, brand communication, etc. After a product is launched, besides recognition of packaging and price, other forms of recognition require certain marketing support. Price recognition has two concepts: one is the price itself, i.e., the level of price, which does not generate purchase behavior; the other is the association between price and value, i.e., whether the product is worth the price, which is the difference between price and value. Low price itself only generates the first kind of recognition, not the second. The second kind of recognition is generated after consumption experience and market promotion. Price recognition does not originate from the price itself but from marketing activities that prove its value. And marketing activities require marketing policy support, which does not fall from the sky. Some people think that big companies have good marketing policies because they have more resources; this is a misunderstanding. The initial policy investment is merely an advance of resources, not free use; it must be repaid through reserved price space and future sales volume. The correct pricing mindset is: when launching a new product, the price should be slightly higher, and then the profit space is reserved for marketing activities to support consumer recognition of the price. The so-called marketing is selling price, roughly meaning this. Of course, we cannot infer from this that the higher the price, the better; rather, we need to balance price and marketing expenses. Because the higher the price, the more effort you need to invest to ensure price recognition. Except for special cases where strategic cost leads to strategic low prices, we can find a basic phenomenon: price is proportional to the company's marketing capability. Of course, it is hard to infer whether it is because low price leads to loss of marketing capability, or because low marketing capability leads to not daring to set high prices. In most cases, price and marketing capability are mutually causal: because marketing capability is low, they have to set low prices; because prices are low, they lack expense support and thus appear to have low marketing capability. Some companies have low prices but initially do large marketing activities. In the early days, this approach might quickly show results and possibly succeed. However, now the market threshold is high, and this "short, flat, fast" approach no longer works. Doing market requires continuous investment; without long-term policy support, it is difficult. Many people lose patience in the face of short-term low prices from competitors, lose their composure, and are lured into the water. The normal market phenomenon is: low-price players come and go, while high-price players remain unmoved. The Vitality Behind High Prices Market activity attracts consumer attention more than price. Low-price products are often silent, while high-price products are often active. In the terminal market, there is a very special phenomenon: best-selling products are often not the lowest-priced, nor the most well-known brands, but the most active products in the market. In the terminal market, there is a "brand similarity" phenomenon, meaning that brands displayed in terminals are basically those recognized by the market. There is even a "brand coverage" phenomenon, where commercial brands (like Walmart) "cover" manufacturer brands (like P&G), meaning that as long as the terminal recognizes it, consumers will basically recognize it too. In the terminal market, products are abundant, and brand recognition is generally high. Whoever is more active is more likely to attract consumer attention. Consumer attention is one of the key factors in purchase decisions. In China's actual business ecosystem, being noticed requires expense. Manufacturers pay fees, and merchants give you opportunities for terminal display. Currently, the most common terminal display methods are promotions and promotions, which cost money. The various fees charged by terminals are actually the result of manufacturers competing for terminal display. If manufacturers are willing to spend this money, it proves that terminal display is effective. Besides attracting consumer attention, terminal activity also makes consumers feel they are "getting a bargain." "Cheap" is different from "getting a bargain." When consumers ask "Can you make it cheaper?" don't misunderstand that as long as the price is a bit lower, they will buy. In fact, this sentence conveys two meanings: first, they recognize the product and price, and have purchase intention, so they want to "bargain"; second, they hope for a "discount" on this price basis, and the discount can increase their purchase determination. The "discount" meaning expressed by consumers is often misunderstood as "cheap," but actually, discount is "getting a bargain." Making consumers "get a bargain" actually means the company has two pricing steps: one is explicit pricing, usually higher; the other is implicit pricing, lowering the transaction price. This process gives consumers a sense of "getting a bargain." If there is only one pricing step, consumers will not feel they are "getting a bargain." The various promotions and promotional activities at the terminal, aside from the theme, are actually to make consumers feel they are "getting a bargain." Those themes are just to have a "just cause." The Driving Force of High Prices When launching a new product, price is a means of perception. After the product gains popularity, price becomes a competitive tool. New product launches with strong communication are rare; most new products are launched quietly. When a new product is launched, consumers lack consumption experience, so how can they judge the product? If consumers cannot judge, they find it hard to make purchase decisions. An old Chinese saying goes, "You get what you pay for," not "You pay for what you get." For those without consumption experience, price is a label of quality, not the other way around. The price of a new product launch is often not for sales but for positioning. The information conveyed by a high price is itself a positioning. Of course, high price does not necessarily directly make consumers feel high quality, but low price easily makes consumers form a low-quality impression. For channel distributors, what they care most about is not so much the price but the price space, i.e., profit. In actual sales, we see that the most price-sensitive are not consumers but channel distributors and salespeople. Channel distributors are more profit-sensitive than price-sensitive. When a distributor asks for a lower price, they do not actually intend to sell at a low price but to obtain higher gross profit. Some distributors with strong operational capabilities, after obtaining low-priced products, may conduct their own marketing activities when selling at high prices. Distributors with poor marketing capabilities, if they sell at the same price after obtaining low-priced goods, will later ask the manufacturer for more policy support. In channel sales, manufacturers must not only set ex-factory prices but also set a price system, which is the gross profit space. If the price is too low, the channel's gross profit space is small; if the gross profit space is small, the channel's enthusiasm for recommendation is low. If it is a well-known product, some may buy without recommendation; if it is a non-well-known product, lack of gross profit space means losing the opportunity to be recommended. For non-well-known products to sell well, besides the manufacturer's promotion pull, the most important is the channel's active recommendation. If it cannot become the distributor's "first recommended product," the possibility of non-well-known products selling well is very small. High Start Low Go, or Low Start High Go? Marketing has a basic rule: launching at a high price is difficult at first but easy later; launching at a low price is easy at first but difficult later. Price-sensitive consumers are easily tempted by low prices. Since they can be tempted by your low price, they can also be tempted by other low prices. Therefore, price-sensitive consumers have low loyalty. On the contrary, price-insensitive consumers are hard to tempt, but once they are moved, they are very loyal. So, low-price consumers are hard to accumulate, mainly because of low loyalty. High-price consumers can be accumulated and can repeat purchases. Market growth lies in continuously accumulating valuable consumer groups. In a highly competitive environment, only a few brands have the ability to raise prices, such as luxury goods. In most cases, the price trend is "high start, low go." A few people hope to open the market with low prices and then raise prices; this is an idealistic idea that mostly does not work. High start, low go actually conforms to consumer psychology principles. According to consumption patterns, only about 5% are early consumers, who are not sensitive to price but only to new things. Price itself is not positioning, but price determines the consumer group, and the consumer group determines positioning, so price itself also has positioning significance. Now IT products basically adopt the "high start, low go" strategy. The "high start" price is to filter consumers, letting these consumers, usually filtered by price, position the product. Price positioning is to form a certain symbol. If this symbol is sought after by the public, then in the process of "low go," more consumers can be mobilized to buy, especially those who could not afford it when the price was "high." -END- Content Selection Reply with the following keywords to search and read related articles: Sales Supervisor, Second-tier Management, Regional Manager, Distributor Management, New Channels, City Manager, Competition, 2015, Manufacturer-Distributor Game, Product Slow Sales, Terminal Visit Management, Route Management, Deep Distribution, Internal Management, Sales Skills, Profit Improvement, Recruitment, Distribution, Daily Management, Team Motivation, Trade Promotion, Sales Misconceptions, New Product Launch, Township Market, New Product Pricing, Sales Target Achievement, Closing Deals, Market Visit Inspection, Baijiu, Beer, Sales Increase, Agency Products, Channel Diversion, KA, Terminal Visualization, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, New Salespeople, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Franchise Recruitment, New Media, Distributor Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Stock Pressure, Holidays, Distributor Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Order Meeting, Team Management, Training, Work Report, Work Report.