Shoe Enterprises Fight Price War To Enhance Themselves

The past year has been a year of frustration for international sports brands in China. According to statistics, in 2009 9~11, Nike's Greater China sales decreased by 3% compared with the same period last year, while another sporting goods giant Adidas's third quarter sales in the last two quarters continued negative growth, down 7% compared with the same period last year. In contrast, in 2009, the domestic sports brand was advancing vigorously.

In terms of net profit, Li Ning Co first surpassed Adidas in 2009, and basically became the leader of the domestic sporting goods market. Then, at the beginning of 2010, the Lining brand went to the United States to open shop and enter Nike's stronghold. At the same time, a large number of domestic and second tier sports brands are also actively taking action, or changing the mode of operation, or expanding the sales terminals. Without exception, they have begun to rob the consumption resources of the Chinese sports shoes market and announce to the world a coming era of "entering the country and leaving the ocean".

In the face of China's huge market cake, the international sports brand will not easily surrender. With the arrival of the peak season for sporting goods sales, international sports brands have launched a series of actions to try to put themselves into a strong position in the market through effective strategies. As a result, the discount activities of some international sports brands began to prevail, and the sharp reduction of prices stimulated consumers' desire to purchase to a certain extent. From this, we can see that international brands have begun to wave the lever of price and fight fiercely to the vigorous domestic sporting goods. Behind this price war is the conspiracy of international sports brands to seize market share. By lowering the threshold of price, and rapidly increasing the brand share in a short time, it has gained the favor of the market, which undoubtedly brings new challenges to the domestic sports brand.

It is true that in today's fierce market competition, besides the use of quality products and smooth channels to attract the market, reasonable price is also a very important factor. From a consumer perspective, prices will also have different effects on consumer psychology, some in order to highlight their status, some in pursuit of cheap and good quality, and only to meet basic needs, so how to set prices is crucial to the sales and operation of enterprises. With the development of market economy, enterprises that regard price as a marketing means are everywhere, and the resulting price war also follows. Many enterprises use competitive price cuts to initiate or participate in price wars to expand market share and enhance competitiveness. This will not only increase sales performance, effectively crack down on competitors, but also help consolidate and improve their existing market position.

For brand shoe enterprises, provoking price war can quickly expand the brand awareness and raise the profitability of enterprises. To a certain extent, it can also bring pressure to survive on some brands with low competitiveness, or become a brand that suddenly rises suddenly against the trend, or eliminate the tragedy of corporate destruction. On the other hand, brand shoe companies involved in price war can also enhance their cost control ability through this way, reduce the cost of product production and sale, speed up the market reaction ability, and promote product innovation and marketing upgrading of shoe companies. In the price war triggered by the international sports brand, it is bound to have a certain impact on the domestic sports brand. Once the price war becomes a strategy rather than an expedient measure, the domestic sports brand will fall into a passive situation. Therefore, these brands should think about how to enhance the core competitiveness of the brand so as to consolidate the hard won market base.

Since the price war is inevitable, the domestic sports brand shoe enterprises should dare to meet difficulties. Shoe companies should work hard on products and services, constantly upgrade their products by using the hardware advantages of enterprises, increase the added value of brands, continuously satisfy the needs of consumers with quality products and perfect services, so as to reduce the sensitivity of consumers to prices, and highlight the difference of brands through differentiation strategy, minimizing the impact of price war on themselves.

At the same time, shoemaking enterprises must formulate a complete early warning mechanism, implement the strategy of responding to price wars in a timely manner, and make appropriate price adjustments based on maintaining cost and profit, and according to the situation of competitors.

Therefore, adopting a flexible way to fight price war is also the key to winning the shoe industry. For example, shoe companies can launch new products during the price war, use new products to open up new markets, and continue to compete with their competitors with their original products, which can ensure that the original products maintain a certain profit and create new profit margins for new products to make up for the profits consumed by the price war. No matter how the shoe companies invest in the price war, they must think rationally and make the right decisions quickly.

To sum up, if the domestic sports brand wants to break through the siege of the price war, it must focus on production and management so as to enhance the core competitiveness of the brand so as to fundamentally solve the problem.

 

Source: China shoes net