Generally, customers are very sensitive to any price increase, even for justifiable reasons. What do you do when the economy is tough? Reduce your quality or increase your price?
What then should you do?
- Offer a 3-in-1 value or complimentary products at an affordable price.
During a fuel price increase in Nigeria, bus drivers and taxi drivers don’t rush to increase prices. They firstly start to carry an extra passenger in each seat row. And remove the booth of the bus to put an extra seat there to carry extra passengers. These extra passengers make up for the price increase in fuel.
Sachetization thrives in a market dominated by low-income earners. Cowbell started this strategy. Blue Band and Power Oil are doing this too.
Nescafe started 3-in-1 in sachets. Milk, Sugar and Coffee. Cadbury Bournvita followed suit.
Milk, Sugar and Chocolate. Ovaltine joined. Milk, Sugar and Chocolate. Milo and Peak too have joined. Even Quaker Oats too has started selling 3-in-1. Oats + Milk + Sugar. MTN reduced the gigabyte mobile data, increased price and still increase the tariff sneakily. They deduct more internet data from customers without making noise about it.
The 3-in-1 strategy is a step further from sachetization. It only shows how poorer the market has become. The purchasing power has been reduced more. When you reduce your quality, you will lose customers too. When you increase your price too early, you will lose customers too.
It works! This will help you to balance the mixture, retain quality and maintain the same price.
2. Reduce the quantity slightly and silently.
Have you observed that noodles are not as much as they used to be? Burger and cheeseballs remove one piece for every increase in cost.
Biscuit companies do a noiseless reduction too. Companies that produce matches silently remove some matchsticks.
Some bread companies remove one or two slices for every increase in cost. Spaghetti companies do this too. They don’t issue a public release for this at all.
It works! Customers do not always or immediately notice this noiseless reduction in quantity. Dear business owners, calm down to think creatively whenever your competitors are hurrying to increase their prices.
It is possible to gain more customers and make more sales when you are doing things differently from your competitors.
© Kingsley Ndimele
Your Reliable Consultant.