MAXIMIZING
SALES OF THE PREMIUM PRODUCTS IN YOUR PRODUCT MIX.
The
most important sales season of the year is upon us. Last
month we
examined the economic factors that determine the best approach to
product ranging for this year's peak season. This month we
look at
merchandising and the "premium product" segment of your specially
selected summer range.
Take a moment
to check back on last month's article. Click
Here!
(Unfortunately, while
it was posted on the website on time as usual, there was a problem in
distributing the announcement emails.)
The
product
strategy
has both an emphasis on
premium quality products that "offer best value
for money", as well as an emphasis on basic products that are
competitively priced. Remember, for this season you're
emphasising both ends of the product range. Keep the emphasis
there, but - but don't forget the middle range too. Just
emphasise that stuff less.
Since you have
arranged to carry greater than usual stock of premium range items, the
task now is to merchandise well. That means good visual
merchandising as well as an offer to spur a buying decision.
We'll consider pricing later.
- If
you are a
retailer wanting to effectively merchandise your premium
quality items,
you will need a premium quality display. That means using a
good looking merchandising stand, imaginatively set up as the "hero
display" in your store. A display like this one,
on the left, might do it for
you.
 |  |  |
| Hero
Display | Spaced out aisles | Poor
display of good products |
Your
premium range must also reflect
"superior style and design", and that means giving your hero display
plenty of space. Open, free space enhances the aura of
superior design and professionalism. Note the size of the
aisles in this bedding store, in the centre.
By
way of
contrast, look at the aquarium supplies display on the
right. They offer
high quality products, but it is hard for the general public to tell in
this display! Make sure your displays tell the quality story
you need to tell.
- If you are a wholesaler or
manufacturer, your key is to get increased retail shelf
off-take for
the summer lines. It's too late for this season to arrange
targeted point-of-sale displays, but why not provide
additional merchandising help to your major retailers?
Now
the display is right, what about the offer? This is not a
"price off" occasion - the offer needs to reflect the high quality
product image. So it's a premium offer you need.
Add an extended warranty, free installation or first service, cleaning
service, or add a small package of an ancillary product. All
these offers show you recognise the higher aspirations of the buyers,
and you are taking every step to make buying and ownership a trouble
free experience.
- Now we come to the most
powerful part of the whole deal - the price.
People don't buy
on price. Every survey we've done on customer behaviour ranks
price somewhere between third and fifth on the list of reasons for
buying. But the price has to be right! Some years
ago, a past client was losing his premium product customers because his
price was too low.
The guidelines given last
month mean we have to have "the best value for money" in this
range. In other words, you have to be the lowest price on a
"like for like" basis, but not massively lower. An example
cited a few months ago discussed a menswear battle, where a shirt price
of $79.90 created a value image against a competitor charging $79.95
for precisely the same item. The amount is trivial - the
customer reaction was devastating. Luckily, if you are
offering the right premium in the sale, you will not be compared to
other prices in such a direct way.
Summarising on price:
- If
you don't have a premium offer, price like that
shirt retailer, and use the "best price" line in the selling
presentation.
- If you do have a premium offer, buy
the premium
on a special discount and add only the direct cost of the premium to
your target price for the main item.
Then
advertise your offer to death!
Like
to talk some
more about this topic?
No obligation, of course. Talk to us Here!
Next month:
How to
handle those
extra basic products that make up the other half of your product mix
for this year's main selling season.
CORROBORATION!
Last month, the product strategy was based on "two
Australia's". Here's how the Melbourne Age pictured it!
Just
two
days after the release of the September "Management Memos", the
Melbourne Age newspaper published an article showing the differences in
state by state economic growth. It is these differences shown
on this map that
led to the product strategy we recommended. (Map courtesy of
"The Age".)
- "MANAGEMENT MEMOS" ENDS -
Any advice, information or comment
contained in this document is general in nature, and should not be
relied on as the basis for any specific commercial, business,
employment, or financial decision. Specific advice should always be
obtained for each individual circumstance. Accordingly any advice,
information or comment contained herein is for general guidance only.
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