Doing Catering Positioning Setting Strategy Pricing Setting Life and Death

01 The Importance of Pricing

If when you start a project and haven't thought about it, how much should you set the price for this product, what will you end up with?

Yourself is a confused person.

Because price determines the cost that consumers pay.

The customer base for a unit price of 200 is completely different from a unit price of 50. So pricing is class division.

Dividing what?

Dividing who your customer base really is, who you compete with in which field, and how big your market share is.

At the same time, pricing determines the entire value chain. Different pricing needs to configure what kind of product, team, service, environment, marketing and other resources are also different.

At the same time, pricing determines the revenue and profit of business operations,

behind the representation, the entire chain of interests of the enterprise.

Contains the interests of customers, employees' profit-sharing interests, suppliers' interests, landlords' interests, shareholders' and investors' interests, and other aspects of the benefit distribution mechanism. So, the pricing is not good, basically scrapped.

02The underlying logic of pricing

Many people have a deep-rooted misunderstanding of pricing: prices must be determined by costs.

For example, a set of restaurant training courses, priced at 100,000, some people may be immediately willing to pay, some may be willing to take out only 1,000 dollars to buy the course, and some do not even want it for free. The former thinks that he can generate more than a million bucks by learning the course, while the latter doesn't.

So price has nothing to do with cost and everything to do with value.

Consumers pay for value, not cost. The consumer doesn't pay attention to how much your rent is, how much your workers are paid, how much your materials cost, he only pays attention to what value I get for my money.

What is the value associated with that?

The answer is, demand.

Why?

For example, a bottle of mineral water in the supermarket sells for 2 dollars, but if it is in the desert may be sold to 100 dollars you will come to grab, the water is still the bottle of water, the value has not changed, change is the relationship between supply and demand. So what does demand have to do with it?

The answer is, scene and desire.

Physiological needs are related to the scene.

Why? For example,

The need for a taxi comes when you have to go out.

It's when you're watching a movie that you have a need to buy popcorn.

It's when you're getting married that you have a need for a wedding dress.

People have different needs in different scenarios, and the prices they are willing to pay in different scenarios are different.

For example, a bottle of beer sells for 3 dollars in a kiosk, 5 dollars in a stall, 8 dollars in a hotel, and 20 dollars in a bar. The beer is still the same beer, it's just a different scene.

Spiritual needs and desires are related.

For example, the cost of a bag may be 500 dollars, hit a lv can be sold for 50,000 dollars. Does that have anything to do with cost? Does it have to do with value?

Clearly neither.

And human nature in the desire related.

People's physiological needs are limited, psychological desire is infinite. This to explain it is very complex, to be from the seven deadly sins of human nature. Maslow needs to speak up, for the time being.

That desire and what is related.

The answer is, perception.

Why?

Human beings are animals that live in groups, and if a person is exposed to a different circle, he or she will have a different vision. Different patterns, different values. At the same time cognitive boundaries are different.

For example. If your friends around you are driving Porsche, you will feel embarrassed to drive your Guangben, and you will have the need to change your car.

If all your friends around you are carrying Hermes, you feel that you can't get your hands on this several hundred dollar bag.

Cognition is affected and new values are formed. At the same time it drives inner vanity and desire, and desire drives demand.

So, perception determines desire, desire determines demand, demand determines value, and value determines price.

With the strength to let the sentiment fall, and so on.

In essence, they are all manipulating representations through the media to change consumer perception and amplify consumer desire. Stimulate consumers to buy.

So the essence of pricing is to manipulate the perceived value of consumers. It is the consumer's perceived value that is the fundamental factor in determining price. Because, how much something is worth, how much it can be sold, always depends on the consumer, depends on his "consumer perceived value", not the seller.

For example, Mr. Eagle is selling a bowl of brisket for 168, another five million dollars to buy the formula, another star sealed test, another Cengjingkong stand, etc. The price of the brisket is not the same as the price of the food, but the price of the food is the same as the price of the food. The brisket is still the same bowl of brisket, but your perception of value has changed.

So what does consumer value perception have to do with it?

There are many answers. For example, an individual's view of consumption, heart account, psychological perception, emotion, philosophy, identity, etc., etc., etc., the consumer's perceived value is related to two words: contrast. An anchor can be a product or something else that has similarities to the product.

For example, when the first tablet was launched, we didn't know how much it was worth, but we could imagine: it should be above a regular cell phone and below a laptop.

Here, cell phones and laptops are the "anchors".

That is to say, when we are pricing, we must first know, what are the similar products in this market, and how much do these products sell for, and then compare our own products, with other products, in order to deduce the price of this product is high or low. (The product of the restaurant is the entire store, including the product + experience + brand.)

This is called the competition-oriented pricing method.

What does it mean? That is, the pricing method of determining the price of goods by studying the production conditions, service conditions, price levels and other factors of competitors, based on their own competitive strength, with reference to the comprehensive cost and supply and demand conditions.

So, many old drivers pricing the first thing is based on the market competition pattern, and the consumption ability of the target consumers to determine the first per capita. Simple explanation, that is, the first set per capita, and then around this price to think of all the ways to allocate resources, so that consumers feel the value.

Don't underestimate the word per capita.

Developing a per capita is dividing the customer base and market, how to divide the boundaries of consumers?

Where do you draw the line to maximize profits?

Draw the line high, the customer unit price is too high, and fewer consumers are willing to pay.

Drawing the line low, the consumer increases, the unit price decreases. May be a year of hard work counted no profit.

So don't look down on the position of this line, behind is extremely complex analysis and insight. Many companies fail to fail in not drawing this line.

Because, high prices need to configure the resource requirements are high.

Low prices require high efficiency and a strong supply chain to create a total cost of ownership.

Many people, even if they know this logic, do not have the ability to assemble and configure the entire value chain.

So, many people can only calculate the total cost of pricing plus the basic gross profit, and then use a uniform public price, to open to the market, expecting to promote the transaction through the conscience of business.

This is the cost-based pricing method that people often use.

The last is at a competitive disadvantage and there is no way around it.

Pricing, that is, based on their own resources, and market competition pattern of judgment, as well as manipulate the consumer's price perception, to set the overall price, according to the price to configure the entire value chain and cost structure.

03The Strategy of Pricing

Even though many people understand the logic of pricing, they may still not have the ability to control it.

Because the vast majority of commodities are in a situation where they are dominated by a few large merchants, this is a situation where even if you know so much about pricing strategy and logic, you're still not going to be able to do much about it.

I have seen a seafood restaurant, was not very good. The owner found a general manager, the owner also trusts him, can be said to be completely decentralized to the general manager to do, the general manager of the heart is very anxious, within a year, constantly engaged in low-priced promotional activities, activities, the performance did improve a little. But at the end of the financial accounting finished stupid, but also a loss of more than 200 million. This is calculated to be more than the previous loss.

What is saddening is that the general manager of this year, every day on time to work, overtime to the night to leave the office, the evening and the weekend also for the business of a variety of entertainment, work very hard, decision-making is also very bold, all the staff are respected and admired, but the final outcome is: the boss helplessly out of the business.

So, it is not the price set a little lower to solve the problem, but if in a fully competitive market. If the enterprise is blindly to increase prices, then many of the old customers can be thrown into the arms of competitors, the final result may be the same as the loss.

This is the status quo of many small and medium-sized enterprises, hovering in the red sea market struggling, do not dare to move the reason. Until finally left the field.

Three price increase strategy. Red Sea breakthrough, get rid of the status quo.

Heap high cost perception

Why many brands are constantly tossing and turning, constantly upgrading, and changing tableware, changing ingredients, changing decorations, etc.; advertisements, claiming that they use how rare ingredients, how much money is invested in research and development, how much effort is put into ingredients, hiring top international chefs, designers, and so on.

These practices are essentially designed to pile up the consumer's perception of the product's "cost" and make it worthwhile for the consumer.

Then again, a lot of consulting and planning companies, every time you go to the A

Party proposal, to go to seven or eight people.

For what to go seven or eight people? It is through the sea of people to

heap high cost perception ah. implied that the party, you see our seven or eight

people for you to do a few months, you this money spent value.

Everyone's common sense remains: this stuff costs so much, that must be awesome, I'll just pay more .....

Providing differentiated value and confusing price perceptions

Whether it's product innovation or value reconfiguration, no matter what way you differentiate. Essentially the ultimate goal is to confuse the consumer's price perception so he can't compare.

Providing added value and elevating the perception of value.

This added value is both material and spiritual. The material level of added value is to create a correlation with other values at the product level, for example, to enhance the service, experience, knowledge, etc., such as the integration of music, performances, etc., are to enhance the relevant added value and elevate the consumer's perception of value.

The added value at the spiritual level is what we call branding.

The essence of a brand is a social identity, and this social identity includes the material psychological level of trust and the spiritual level of identity. For example, we all know that Hermes purses are sold for tens of thousands or hundreds of thousands of dollars, so the people who use Hermes are at least the people who can afford to pay this money.

How do I show that I care about the quality of life and can afford to use hundreds of thousands of dollars of bags?

It's not like I can stick my bankbook to my forehead every day.

It's easy, I'll just buy a Hermes.

Likewise, how do I show that I'm a white-collar worker who likes simplicity, elegance, and technology, and that I'm well off? It's easy, just go out with a Starbucks membership and an Apple 3-piece suit. So why would someone be willing to scrimp and save for months and buy luxury bags and clothes with their saved paychecks?

It's because they believe, or are under the mistaken impression, that owning these "symbols" puts them in this class.

This is actually a very stupid fantasy.

The external "symbols" are just a ticket. Even if you have this ticket, what can you do without the resources to get into this circle?

You may not even be able to get into the conversation.

This is the illusion that "branding" brings.

In short, if you're paying money for something that makes you happy, enjoyable, fulfilled, and you think it's worth it, then it's worth it - even if it's not really good value for money.

That's what Consumer Perceived Value tells us.

That's why you need a brand: not only do you have pricing power and a premium, but you're also establishing a religion and creating a price barrier to keep out potential competitors.

04Three pricing strategies to win a competitive advantage

Even if you know the underlying logic of pricing, and know how to use a variety of price increase strategy to break the game, you can be at your fingertips to solve the problem

Problem?

Obviously not enough.

First of all, for high-priced products, if there is no reason not to buy, other products can easily replace your words, your high price is a kind of self-help, in addition to your own recognition, the consumer does not think your price is very reasonable

Summary

1. Consumers through the rational comparison, and perceptual illusions to arrive at the cognition. Cognition determines desire and demand, demand determines value, value determines price, price determines cost.

2. Pricing must be combined with the consumer value perception, the competitive landscape and their own resources and costs of the three dimensions to consider pricing.

3. Prices are set low to raise prices, you can pile up high cost perception. Provide differentiated value, confuse consumer price perception, and provide added value to reshape consumer price perception.

4. Enterprises through product innovation into the primary market price as high as possible. To the back of the imitators to leave a good profit space. This is called skimming pricing method.

5. High-speed development of the growth market. Whoever first reduces the price of the first to take advantage of the market. This is called the price penetration method.

6. Red sea market in the price perception solidification, you can use to increase the price anchoring method, to pull up the profit margin of the whole industry.

Lastly, an article is not enough to say the doorway of pricing, price is not a single existence of the system, it must be dependent on the enterprise the entire value chain, and independent of the existence of a particular market, so much so that a small system of butterflies fan a fan of the wings, not far away from the place may be a tornado.

So pricing is about strategy. Everything is one thing.