Cut Prices in Nigeria, You Can Pick A New Positioning
It may be counterintuitive but from all indicators, if you want to win in Nigerian markets now, you may consider cutting your prices! There is no debate there: customers are not in the best position to absorb price increases despite the pressure from inflation, forex, etc. Of course to cut prices, you must also cut production costs - and tech can help. If you are not evolving your pricing playbook, in Nigeria, you will lose market share. Think Netflix as you execute:
"As Netflix clamps down on password sharing and raises prices in the U.S. and Canada, it's cutting subscription fees in over 30 other countries. Bills will be lowered in a number of countries in the Middle East, Latin America, east Africa, Europe, and Asia. The price cuts apply to certain tiers and some subscription costs will be halved. The move is intended to help Netflix appeal to customers who find themselves with a growing list of streaming options. Netflix is available in more than 190 countries and territories."
If your margin is 25% today, move it down to 15% to keep your market share because not many have money to buy.
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Comment 1: But what is the margins are not controlled by the seller?
If I sell bread at N100 and my cost is N80
But, I sell not at N120 because my cost is now N112.
How does lowering my margin help?
It has already gone down due to rising costs.
My Response: That was why I said "Of course to cut prices, you must also cut production costs - and tech can help." Your example did not account for that link. You selling N120 is a reaction that cost is N112 but that is without pain as you lose customers. My position is this: is there anything you can do to push that cost from N112 to N90?
Comment 2: Very true. That is situational awareness. A dip in price to increase brand loyalty. Lack of awareness has made many turn off the very people they want to attract for businesses. A good example is the POS that many have developed hatred for in this short period because of the ridiculous charges.
Minds have been made up not to patronise post- crisis.
A signal to poor customer understanding from the managers.
My Response: "A good example is the POS that many have developed hatred for in this short period because of the ridiculous charges." -nice example there. Charging N2,000 to give someone N10,000 makes no sense
