My friend John Mello wrote a piece about the widespread price reductions and their underlying causes over at the E-Commerce Times.
Vendors across industries are lowering their prices as a result of the market’s contraction, which lowers the relative cost of their products compared to those of competitors. This tactic might raise demand, enabling them to get rid of their excess inventory often at a loss by increasing demand.
Because it collapses margins, resets buyers’ expectations of price, and can drive businesses out of business if they don’t have enough reserves to cover what could be a protracted revenue shortfall, this strategy affects all industries and has the potential to be problematic.
We’ll have a lot fewer businesses once this crisis is over, but what are the alternatives? Is there a better way to guarantee revenue without needlessly sacrificing profits? Let’s look into that this week, and we’ll finish with my Product of the Week: a new Thunderbolt laptop dock from the Microsoft Surface team.
Issue with the price war
Because economic factors such as the recession and concerns over a U.S. S. These price reductions might not significantly affect volume, especially if other vendors in the segment follow suit. Other reasons for price reductions include default and inflation problems. Price wars are disgusting, and enduring one can be excruciatingly painful.
When business leaders lack marketing expertise, they frequently use this strategy. They follow what they believe will work. In an effort to boost sales and lower inventory, companies often reduce their prices. What they either overlook or fail to realize is that their rivals will respond in what has now become a pricing war, forcing them to keep slashing prices until they reach some arbitrary low point and run out of gas.
A price war may require you to respond, but you should never initiate one because, absent a sizable cost advantage, there is a real possibility that you won’t make it out alive.
The opposite reaction of a textbook
I have several degrees, but my first one was in merchandising, which is a type of applied marketing. Throughout my entire career, I have been in and out of marketing, most recently as a consultant.
Increased marketing spending on efficient demand-generation marketing to attract customers is the standard response to a slowdown in demand. You can target those who are or will soon be in the market for what you are selling by bundling or doing tie-ins.
However, there are some common issues with this. The outcome takes time to manifest. A demand-generation campaign must be developed, tested, and run over several months while vendors are already facing a crisis. In addition, streaming and digital content have given us some brand-new issues. It appears that conventional marketing is no longer as effective as it once was.
People no longer pay much attention to commercial-based TV or radio, especially younger demographics. Since the internet’s inception, print media has been on the decline. However, because Google, which controls online advertising, and Facebook, which should be a leader in targeted advertising, don’t seem to understand how to do marketing, their platforms don’t provide the conversion rates that advertisers require.
Influencer marketing has been severely harmed by bad influencers and diluted by the growing number of them, and placement—the act of including a product in content—hasn’t produced the positive results we’d hoped for.
The solution might lie in generative AI
Facebook and social media in general, I assumed, would be the solution to this. Facebook should be able to serve up relevant and useful ads as it gains a lot of knowledge about you over time. But because of the widespread fraud that has resulted from its policy of allowing almost anyone to advertise, many of us no longer trust Facebook ads.
You could switch to direct marketing, but staffing a call center is expensive, and moving that call center to a region of the world with lower labor costs usually really irritates potential customers.
But what if you fully exploited generative AI?
A scaled-up relationship with a person can be built with the help of generative AI, which can mimic almost any voice and respond as if you are speaking to a real person.Before being released, AI can be taught the best skills. The customer might appreciate the call or message if you do your job well.
However, you must approach the issue as a top salesperson would, which is to offer value, interact with the client, and build a rapport. In order to start a conversation and build a stronger relationship before pitching something new, this method is simpler if the person is already a customer and you can provide free information or a service that the customer wants.
This should take care of the marketing issue if the AI is properly funded, developed, and conceived, and the customer is correctly profiled so you know enough about them to develop a deeper connection. Using the same technology, you can survey customers about the goods you’ve sold them, test the market for potential new product concepts, and receive early alerts about potential product issues before the customer returns the item and blacklists your company.
The future of marketing is generative AI, but given the current situation, it might be necessary for that future to begin now.
I’m done now.
Many, if not all, markets are in freefall, as John noted in his article, largely as a result of strategic price cuts that are sparking unintended price wars.
Increased marketing would be a better course of action. But in addition to a decline in marketing talent over time, market development funds (MDF) have also rolled into margins and no longer support marketing, and the venues where we once conducted marketing are losing their effectiveness.
To better interact with and sell to customers, generative AI will soon be a powerful tool. We shouldn’t have to wait that long, in my opinion. Maybe it’s time to step on the gas and start funding generative AI marketing right away, before a lot of businesses fade away.
Dock for Thunderbolt 4 on the Surface
Docks for laptops have undergone many changes. They initially served mainly as a mechanical means of securing a laptop to a desk and were primarily targeted at theft. One of our overseas offices had a lunchtime visit from a pretend tech, and when our staff returned, the office was surprisingly laptop-free. This is when I first personally experienced the value of them.
Since then, the security on laptops has decreased the risk of theft, and with lower prices, the risk of a stolen computer just doesn’t seem to be the primary motivator for office thefts. If one is stolen, it is more likely to happen while you are traveling or because you left it somewhere, either from your car (never leave one in plain sight).
These days, docks are more of a convenience, allowing you to plug in your keyboard, mouse, monitor, some peripherals, wired Ethernet, and power with just one plug. They make life easier by allowing you to leave your charger at home, in your bag for your laptop or backpack, and to connect and unplug everything that is wired to the dock more conveniently.
Extremely quick throughput is an additional benefit of a Thunderbolt dock. Nevertheless, it typically only performs well with Intel-based products and for users who need to work on huge datasets, images, movies, or AI. An illustration of this is the new Surface Thunderbolt 4 Dock.
It will probably work with other Intel-based Thunderbolt-enabled laptops and (with reduced performance) non-Thunderbolt products (like the majority of OEM-sourced power supplies and documents), but it will work best with Microsoft Surface products: the Surface Laptop 5, Surface Laptop Studio, Surface Pro 8, and Intel-based Surface Pro 9.
Remember how Microsoft created the Surface family to appeal to people who, like me, want a design-forward product but don’t want to deal with Apple. As I’m writing this on a laptop on a plane and missing my home office screen real estate, this dock’s Thunderbolt connection allows it to support up to two 4K monitors, which I wish I had at the moment.
It has a good port out, comparable to a desktop computer, and an audio jack if you’d rather use wired headphones than wireless ones. If you are concerned that one of your coworkers might “borrow” the power supply, you can bolt it to your desk. The power supply is remote and can sit on the floor.
It costs $299.99, which is more expensive than most Thunderbolt docks, but if you have a Surface laptop that supports Thunderbolt, it is worth it. It will also work with non-Thunderbolt laptops, but for those, you can save about $50 by upgrading to the Surface Dock 2.
The Surface Notebook is one of my favorite laptops; it strikes a nice balance between design and performance, and this dock makes that laptop even more useful, so the Surface Thunderbolt 4 Dock is my Product of the Week.