– replicate it (fight back)
– change the target market (escape from it)
Maybe you already get the point, first, you can replicate it which means you can also do the free units strategies, but as I tell you this solution requires a connecting dot, so
when you do the replicate strategies, you will also need to be aware of your cost structure and your cash flow, is it profit or not?
You can also change the target market, and maybe find customers who probably do not have an interest in buying free units (even though everyone liked it).
So if everyone likes it, why don’t just do both? You can replicate the free units strategies and also change the target to the niche market.
Again, this is all your business decision, if you find that the free units strategy is not profitable then I recommend you not do this strategy and find a new market instead that may have an economical segmentation of middle class only, or middle class to upper class (even though
both classes also like a free unit of briquettes, whether B2C or B2B)
If you see this strategy as having potential and still giving a good revenue for you, then you can use this as one of your business values also, and then niche the market so they can see your reputation more.
– focus on marketing and education
– find a new target market
This can be tricky sometimes because when you focus on marketing and education, it will give you lots more costs and expenses.
If you have less power, I recommend you to change the target market instead. Because education marketing needs lots of money and the best strategy is to let
the bigger business is to educate the products to the unaware customers (even though they just not educate the products, but also introduce their brand as well)
If you have the power to do so, then it is okay if you want to do education marketing, but it needs step by-step, lots of marketing videos, and lots of budgets, so it needs you to also consider for your business in the future, because maybe the customers already educated about the products and your brand, but again the issue is not just about brand awareness. Maybe your customer already know you but their characteristics are low budget and finding the cheapest.
So, if you don’t have power and want to change the target market instead, then the best target market is B2B.
B2B customers are more educated and aware of the products, they know what they need and what specifications they want.
B2B that needs briquettes is also massive, it’s either a reseller (BBQ, shisha), restaurant, retailer, Hookah bar, and more.
You can sell it to all of them if there is less competition and you feel that you can compete with your competitors. But if not, try to nich it more deeply again by selling just for restaurants only, or resellers only. And when you are ready to scale up, you can expand your market more widely. It’s up to you.
– change the target market
– add more value to your products
– a unique selling point
As you already read, changing the target market is one of the best to solve this price war problem. Niching the market will give you fewer competitors and less customer reach (as we explain in number 2. How to solve quality solutions is not a big focus on the market).
And then to solve this you also need to add more value to your products, what is the value? There are lot of value you can add in this charcoal briquettes business.
Such as the free units that we discussed early on, you can also add value such as “no chemicals included “, long burning time, no smoke, no ODOR, high and stable heat, low ash content, white bright ash color, not easy to cracked products, you can also add environment friendly to your products, and more.
So what about low price or affordable price? Is that a value? Maybe a low price is also a value, and maybe you can also mention it in your marketing and more.
But, if you put a low price value, it means you also join the circle of death right? The price war? So I recommend you to not do that if you want to avoid the price war.
Even though low price is a value, as Alex Hormozi (Founder of Acquisition.com) said in his book “$100M OFFERS”
He said “Lowing the price is the most embarrassing value”
But otherwise, you also can add your value when you sell your charcoal products in a
higher price. How? When you raise your price, you increase the value the consumer receives without changing anything else about your product.
People know that price, but they just focus on price and not on value.
So, you can change your market into a niche and sell it at a stable or higher price. This strategy is best when you do experiments or interviews by asking your potential customer “Would you like to buy this charcoal briquette for X price, why?”
With value, increasing price is not a problem, but it’s a MUST.
So you need to increase the value of your products, how to do it? There are several things:
