Yesterday evening (November 22), Nokia held a press conference in Hong Kong to announce The Hong Kong version price of Lumia920 and Lumia820 surprised fans: the price of Lumia920 Hong Kong Branch was 5598 Hong Kong dollars (about 4500 yuan), while the price of Lumia820 Hong Kong Branch was 4398 Hong Kong dollars (about 3534 yuan). As for the price, some netizens said: "It's true that the small one (Lumia 900) is happy, the big one (Lumia 820) is harmful, and the strong one (Lumia 920) is extinct. The loser can't afford to roll it..."
Some netizens said that according to Nokia's consistent pricing strategy, it would be sold off in less than three months. Love to play computer games I also sorted it out《 Take stock of Nokia mobile phone diving 》What is the reason why Nokia's new product pricing is always high and low?
Skimming strategy?
Nokia's pricing method of "opening high and leaving low" is called "skimming strategy" in marketing.
Fat skimming strategy is also called "high price pricing strategy", that is, in the input phase of the product life cycle, set a high price for the product that is far higher than the product cost, recover the investment as soon as possible, and obtain high profits, just like skimming the first layer of milk fat from hot milk. Later, as time goes by, we will gradually reduce the price to enter the market with great flexibility.
"Cheap goods are not good, good goods are not cheap". The story that adding a zero to the price of goods is sold out shows this truth. The skimming strategy can use the high price to establish a unique image of the product in the market and help enterprises to maximize short-term profits, but if it is not used well, it will affect the long-term operation of enterprises. It is generally believed that the quick skimming strategy is applicable to:
- Products with short life cycle;
- Fashion products with fast variety changes;
- High tech products with characteristic technology.
At the same time:
- There are enough consumers with strong purchasing power and insensitive to price in the market;
- Our products have obvious differentiation advantages;
- When competitors join, the enterprise has the ability to quickly switch pricing methods, that is, improve the competitiveness by improving the cost performance ratio;
- The brand of the enterprise has traditional influence in the market;
Through the above comparison, we find that Nokia is fully equipped to implement the fat skimming strategy.
Why Skimming Strategy?
However, having the above conditions does not mean that we must do it. Why did Nokia choose the fat skimming strategy? This is a long story. Let's start with how Nokia became the leader of mobile phones:
Anyone familiar with the history of Nokia knows that Nokia is an enterprise that started the pulp business. In 1960, Nokia established the cable department, which is also the original origin of Nokia mobile phones. In 1982, Nokia (then called Mobira) launched the first NMT450 mobile phone Sensor, which has become popular since then. Mobile phones have also become one of Nokia's main profit points.
Instead of focusing solely on mobile phones, Nokia has entered the household appliances, computers, BP machines and other industries. However, Nokia's diversification strategy did not succeed. In 1988, Karemer, then the president of Nokia, committed suicide in despair.
In 1990, Nokia's board of directors tried to sell its mobile phone production business. However, Ollila, the head of the mobile phone department, came to the opposite conclusion after four months of research: Nokia should not sell its mobile phone business, but should go all out to produce and sell mobile phones. Ollila believes that Nokia should focus on mobile phones and mobile network devices, focusing on GSM mobile phones, and go all out to do global markets and value-added services; If you can plan carefully and make sure that you don't make mistakes in every step, you can defeat the strong enemy and become a leader in the industry.
Nokia succeeded. At the end of 1993, European countries began to adopt GSM digital mobile phone communication standard as the new unified standard. Nokia has also carefully prepared a 2100 series mobile phone and put it on the market. The sales target of this model is only 40000 sets, but unexpectedly 20 million sets were sold! This enabled Nokia to turn losses into profits at one fell swoop and become famous. Taking advantage of this momentum, Nokia overtook Motorola and Ericsson and became the leader of the global mobile phone industry.
Nokia, which has come out of the dilemma, knows that success is not easy. In the face of competition from Motorola and Ericsson, Nokia launched new products faster than its competitors, and launched a design, manufacturing and price war with its competitors. At the peak of this war, Nokia launched a new product in an average of 35 days. It is with this speed that Nokia has achieved full coverage from the low-end to the middle and high-end, and has driven the price of mobile phones down.
This is exactly The origin of the quick skimming price strategy: Nokia uses different products to meet the needs of users by virtue of market segmentation. On the one hand, Nokia sets a high price for its products when they are launched to maximize profits in the shortest time; On the other hand, Nokia can quickly adjust its price strategy and carry out precise attacks against its competitors by virtue of its faster product iteration speed than its competitors.
The details of Nokia's product division can be seen from the above figure: Nokia basically divides its products into high, middle and low grades at a price of 500-1000 yuan, and even takes every 0.2 inch of the screen size as a division: for example, if the screen size of a series of entry-level models is 2 inches, then 2.2 inches is a mid-range model, and 2.4 inches is a high-end model Nokia's "sea of opportunity tactics" were also followed by HTC, and achieved good results.
The end of Jihai strategy
For Nokia and even the entire mobile phone industry, 2007 was a turning year. After 2007, Nokia's performance began to plummet, and its stock price has dropped by more than 90% compared with the high point in 2007, all because of the birth of a revolutionary product: 。
The launch of the iPhone can be described as "reinventing the telephone". Just like Nokia's first chance to discover GSM, iPhone seized the new opportunity of smart phone+touch screen. The emergence of iPhone has changed the way of playing mobile phones and formed a clear separation from the previous mobile phone products. The so-called geomancy turns. Now it is Apple's turn to set a high price for iPhone and implement the fat skimming strategy.
Unlike Nokia, Apple implements a single product strategy, but with far more than the design and user experience of other products, Apple's segmentation and skimming strategy is very successful. Apple is also very cautious in extending its product line. On the one hand, it maintains the high profit rate of single products through the boutique strategy. On the other hand, this single product strategy is also an important condition to ensure the rapid development of its iTunes ecosystem. The single product greatly reduces the hardware adaptation problems of developers, allows users to enjoy the APP more and faster, and makes IPhone realizes value-added. In contrast, Nokia's full coverage strategy seems perfect, but the rules of the game in the mobile phone industry have changed. This strategy may work when it is based on hardware, but now it has become a constraint for Nokia.
At the same time, Nokia's new product pricing still follows the diving strategy of "opening high and going low" in the past. Indeed, it is very difficult for a giant like Nokia to change the inertia of the past, but Nokia must realize that the successful experience of the past can not be copied. If we ignore the changes in the environment, we will be like a frog in warm water and don't know how to die at last.
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