Almost for the entire retail market, summer season means sale, discounts and promotions. The financial crisis forced us to lower our prices below the norm. We can’t afford to go lower one more time. And if we don’t, competition will. We’re stuck. What do you think?

Once upon a time, there was one grocery store in each neighborhood selling soap, cheese, bread and oil. When customers wanted soap, they asked for… you guessed it, soap! There were no ‘brands’. But then, competition got involved and ‘brands’ were developed to help customers differentiate between products. With time, customers couldn’t see the difference between these products so they went by price. This is where the first war price was ever born. As prices started to go down, maintaining healthy margins that can help the companies to grow became almost nonexistent. When the situation got so unbearable, brands focused on adding more value to their products so they can justify increasing the price.

Slowly, the rest of the market started to follow and before you knew it brands were competing on benefits and features, value, lifestyle and experience. This cycle repeats itself every now and then for different reasons and influences. This time, it’s the financial crisis that caused the dip in margins. If you want to get out of it, don’t focus on price. Focus on introducing new products, adding more value and on developing unique customer experiences. And if you feel that a promo is an avoidable, make them fun and engaging so that customers gladly pay you…and that’s just my two cents.read what others have read

• two cents: sales target blues
• two cents: I say quality, you say price
• two cents: crisis? freeze

Many companies around the world have big programs for society, employees and the environment. But they have taxes to pay, increasing salaries and shareholders that demand higher profit. How can they do all these things and satisfy their shareholders?

Civilian airplane pilots and flying staff have to go through regular health checkups and measurements to make sure they’re fit to fly and perform. This policy makes almost all airline companies give gym memberships to their staff for free or at highly discounted rates. Some even provide a gym facility. The company factors the cost as part of its overhead expenses like car or mobile allowance. The staff factors their share of the cost as a requirement for keeping their job; it’s like rent, you pay it without thinking about it because you need place to live. Great companies that manage to give back to society, the environment, and their employees have already calculated these budgets as part of their business model or cost of sale. When you don’t take such amounts from your gross profit, it feels less painful.

As for the shareholders, some have been convinced by senior management that such activities are necessary to ‘look good’ to customers, prospects and employees. Others agree that companies have a role to play in their surroundings. It’s just a ‘part’ of what they do, not ‘an addition’ to it. What can you do if you’re not the decision maker on similar issues in your company? Suggest adjusting the pricing strategy to include such activities in the cost of products or services in the name of “Customers demand it from everyone now.” And find a way to add value to customers to accept the new prices. First step: Get shareholders and senior management to agree. Next step: Engage them in the activities to take ownership and, with time, believe in it…and that’s just my two cents.read what others have read

• two cents: clueless boss
• two cents: do as I say, but I won’t
• two cents: crisis? freeze