In this challenging economy, some companies have created less expensive versions of their own products instead of lowering the prices of existing products.
Here are some tips to help your small business survive and thrive in this economy.
Love the Low End
Scott D. Anthony, Author of The Silver Lining: An Innovation Playbook for Uncertain Times, said "The biggest obstacle in embracing the low end really is an internal obstacle. You often look at the low end businesses and you say they are unattractive businesses; they're places where we just can't make any money. And the reason why companies can't make any money is because the low end looks different through the lens of their established business model. So they have to find ways to create new business models, new cost structures, new ways of operating so they can make money at low price points."
Don't Change What your Consumers Love Most.
Paula Deen is known for traditional southern cooking. When she introduced her exclusive baked goods line with Walmart she played the same calling card. The line of pies and dessert bars are still "made with nothing but the best ingredients" but by partnering with Walmart, the packaged items are sold for 75% less than the pies from Paula Deen's website.
Hard Candy Cosmetics took a risk by pulling away from department store counters and specialty stores like Sephora. However, by lowering prices and introducing the product to Walmart shelves it can be argued that the cosmetics company has reached a whole new demographic of consumers.
Remember to Make a New Product Instead of Just Offering Permanent Discounts.
"If you don't innovate then not only do you miss the market but you also create in people's minds this view that it is always going to be cheap and that is a very hard view to change in the long term," Anthony advised.