Bundling is one of the pricing strategy, if it is designed and implemented properly, will result a sales volume and margin increment and at the same time drive you competitor frustrated. But this is easy to say than to make it real happen especially in the INK WORLD.
I have two excellent cases where Yeni and Tiomin both did a great bundling for the graphic supplies product.
From this two cases, I try to analyze why their bundling was successfully accepted by their valuable customers:
1. Understand the strength of your product
You have to understand which product you offer is very much favor and frequently used by the end user, usually it is a quality stable product therefore you should be able to sell at a higher market price (E.g our negative plate is strong). At this point it is natural that your competitor will try to substitute that product with a cheaper (something much more cheaper price to kick you out). The usual reaction is to compromise and offer lower selling price and ask for more volume, but a creative counter offer using bundling will even result in more volume and getting extra business for a new item.
2. Understand your customer buying habits
Without a depth understand of what the customer buy in a period, it is difficult to set up an attractive bundle, if the by product comes as a bundle is not useful or not frequently used, they will take it for grant and do not really trigger motivation to accept your offer. Here a close understanding of the buyer’s buying pattern and habit is needed.
E.g: Customer also use positive plate and Fount Solution but buy from competitor at cheaper price.
3. Design an attractive bundling offer
Don’t be timid, your offer should be “brave” enough to trigger the buying motivation, but also give them challenge to achieve it
E.g: Ask for extra negative plate volume without reducing price (or a bit) but giving huge amount (enough to cover at least one month stock of customer) of positive plate for FREE or giving Fount Solution for FREE.
4. Do this offer in a limited period
Create reason that this is a promotion period therefore only valid for a limited period. Once they accept the offer, keep watching how your competitors react, if competitor is not tough enough to hang on, they will leave the competition ground hence, the pressure for price reduction will be over. If this is the case, than the offer will be terminated and back to normal term
5. The safety check point for a bundling offer
The RMP% bundling package will be the safety check point, although one product is given away for FREE, as long as the total RMP% is still in line with company policy, this offer should go a head, hence it will result in more market share at that customer.
6. It will drive your competitor crazy
If the package is designed properly, the competitors who supply the complimentary product (in this example is positive plate and Fount Solution) will be frustrated, as practically they cannot just easily drop their price anymore to get back their share as those product are price as Zero alias FREE.
From the above points, the important points are No. 1 & 2, therefore. As a good sales executive you should systematically to map out the buying habits of your customer.
The following data is important:
1. The total value of consumer goods your customer spend per month
2. Who is your competitors on each consumer product
With a good knowledge of those two data, we can offer a bundling solution to gradually get at least 50% of the value your customer spend and hence secure our position as a major supplier to our customer.
Finally we will achieve our slogan as: To become our customer’s partner of choice
Remember the art of War from Sun Tze
Know Your Enemies
You will not be defeated
Know the Weather
Know the Terrain
Hundred battles hundred Victory
ActionCOACH South Jakarta business coaches guide businesses in selecting and implementing effective and cost-efficient marketing strategies to boost results with a proven 17-week guarantee. For more information on business coaching, visitwww.actioncoachsouthjakarta.com or call 021 2567 5775 .