How to deal with the price war

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In fact, price war is also a good competitive strategy, with simple method, easy organization and implementation, quick market effect and wide application range, which is applicable to almost all enterprises. Although the price strategy is easy to use, after implementation, the long-term effect and the actual benefits and risks it brings need to be carefully examined.

But one thing is certain, the problems caused by excessive use of price strategy are also obvious: disrupting production and marketing plans, directly losing profits, and forming bad habits of business personnel and customers; To a certain extent, it forms negative problems such as dependence on price and waiting thought. Of course, as a big enterprise with deep pockets, it has the ability and confidence to face and solve the negative problems brought about by these price wars. In addition, sometimes price war, as a powerful competitive weapon, will also bring positive effects to large enterprises, such as cleaning competitors, changing market rules, expanding market share and opening up new market opportunities.

Therefore, large enterprises are often the initiators of price wars, so for small and medium-sized enterprises, it is hard to say whether they can survive if they don't follow suit, customers will be lost and sales will drop. In short, for small and medium-sized enterprises, the price war brings them more harm and risk.

As the saying goes, "everything is established in advance, and it is abolished without advance." Therefore, prevention is undoubtedly the most effective solution for small and medium-sized enterprises.

One of the notes: set and list the initiators of price wars: Generally speaking, large enterprises are often the initiators of price wars. Therefore, as small and medium-sized enterprises, we must first find out which enterprises may launch price wars at present, set them as dangerous objects, and sort them one by one according to the degree of danger, especially those enterprises with a history of launching price wars and those enterprises just entering the industry, which should be regarded as dangers in danger.

Prevention 2: Where will the price war be launched? Re-analyze the large enterprise chain that is set as a dangerous object. The operation of an enterprise is a complete chain, from raw material procurement to production to sales. There are several links during this period, which constitute the chain of enterprise operation. Any abnormality in any of these links may trigger a price war for enterprises. Here, it is necessary to list these links one by one to understand.

Prevention 3: When will the price war start? Large enterprises will not launch price wars for no reason, they must be stimulated or influenced by something. For example, sudden changes in the industry, the emergence of new competitors, changes in raw material prices, accounting year settlement, the approaching settlement period of listed companies, and personnel changes in enterprises will all lead to price wars. These factors that may lead to price wars have to be targeted. After setting, it is necessary to carry out targeted monitoring, establish certain information collection channels and analysis systems, and timely observe the changes of these large enterprises in related aspects and their impact on prices.

Prevention 4: Prepare a plan: In the event of a price war, many small and medium-sized enterprises will often be in a mess, and bosses will often be short-circuited and tired of coping, which will inevitably lead to mistakes in their busy work, which will lead to greater losses. Therefore, in normal times, when the bosses of small and medium-sized enterprises are sober-minded, they have to prepare relevant plans in advance.

When people consider problems in a relaxed environment, it is easy to think carefully about the source of the article, put forward many constructive plans, summarize and evaluate the handling of these cases that have happened, and make further revisions. For some cases that have not been involved, we can also fully analyze and demonstrate, formulate and arrange more suitable solutions, give full play to everyone's imagination, think through the problems and make them as detailed as possible.

Prevention 5: Inform in advance: The harm of price changes is mainly reflected in the impact on downstream customers. Because of price changes, downstream customers will naturally change their purchasing objects and reduce the purchasing quantity, which will have a greater negative impact on the sales of small and medium-sized enterprises. Here, small and medium-sized enterprises can establish a price war prediction system for downstream customers, provide industry analysis suggestions to relevant customers in advance, and actively inform downstream related price changes in advance to strive for customers' understanding and cooperation.

Precautions 6: Establish a compound interest system: If downstream customers change the quantity and object of purchase just because of price changes, it explains another problem: enterprises and customers are completely linked by products, relying on product interests as the point of cooperation, and there are no other forms of interests. This product-based interest form belongs to a single interest form, which is easily disturbed in one way or another. For example, once there is a price war, the cooperative relationship established between enterprises and customers will soon be washed away. Here, SMEs need to think about a problem from a deeper perspective. In addition to a single product interest, what other forms of interest can be brought to downstream customers between enterprises and customers, so as to realize the compound interests formed by multiple forms of interests between enterprises and customers, and the cooperative relationship between the two sides is closer and stronger. So even if there is a price war, it will not have a serious negative impact.

In business, every problem has a solution. When we study business problems, we are actually looking for low-cost solutions. These are just some low-cost solutions from the perspective of prevention. In addition, there are many low-cost solutions to consider, for example, the differentiation of product strategy, sales channels and sales models. In short, small and medium-sized enterprises can't face and solve the price war only from the perspective of price itself.