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“Price war” spoiler “led T8 tubes lamp market enterprises to focus on targeting high and low prices?
cob, tcob, mcob, led tubes, t5, t8, light lamps, price review: Cheap tactics in the market is usually only play a “spoiler” role. In adversarial competition, high prices are often distracted or frightened cheap, but in the long term, low-cost always ends up face of high prices, even in the face of high prices suffered a crushing defeat.
Semiconductor lighting network news hot summer weather hits, people inevitably restlessness, but in the LED lighting industry, the gathering is more violent lamp price war, more like a fire burning throughout the industry moment, but it has long been provoking restlessness heart.
At the beginning of or shortly before the time, the face of “this year, the industry price war will continue,” “international giants participate in price wars” and other issues or events, perhaps we will be in a “spectator” mentality, such as standing on the sidelines, be some talk, pointing country. But now Op lighting, Foshan lighting, wood Linsen, Huaqiang brand companies added LED led T8 tubes Tube Price flame wars, the LED led T8 tubes tube price reduced competition category $ 10, directly touch the lamp Maori major companies and products bottom line. It is understood, Foshan Lighting Classic Series 15 watts, 1500 lumens LEDled T8 tubes pure glass lamp promotional price adjusted to 9.98 yuan / support; Op lighting LED led T8 tubes glass raised to 9.90 yuan each; Sen lighting lamps LEDled T8 tubes price hit the lowest 8.8 yuan / support, Huaqiang state led T8 tubes tube Chu Huojia prepared at 6.8 yuan / support. This time the price war caused widespread concern in the industry.
Prewar analysis
Four reasons resulting price war To better understand the emerging LED lighting industry price war, first of all we can to investigate the root causes of the price war is usually defined and generated.
The so-called “price war”, generally refers to between enterprises race to lower market prices of commodities launched a commercial competition, the main internal dynamics there are market driven, cost-push and push technology, the purpose is to suppress competition, occupying more market share, digest inventory, such as the hubbub of Jingdong Dangdang price war, LED lamp lighting industry price war. At the same time, the price war also refers to the price as a competitive strategy through a variety of market competition, there will be high to win the case in certain industries.
Reason 1: seize the market
As the product of a rich, diversified, producing the same products business increased, leading to similar product structure, technology and low added value. Many enterprise product homogeneity is very serious, there is no product innovation, technology updates slow, lack of differentiation, enterprises occupy more market share and make strategic price cuts or even a price war.
Feature of this situation is the price range, wide price range of products and regions, long duration, mainly initiated by a seller’s market, prices generally do not return to the original price level. This price will generally reduce their profitability, especially in the seller after the follow cause other prices, it could lead to companies turns lower prices, causing a price war.
Reason 2: Cost to drive
Industry economies of scale will lead to lower costs for the industry. Current computer and mobile phone industry is a prominent representative. As the industry has become the scale, technology replacement fast, so the cost of the entire industry will decline in the cost of natural decline will lead to falling prices. In order to have a cost advantage as the basis for a price war. Some companies through large-scale operations, a healthy cost structure and effective management practices within the industry to make their larger cost advantage and can make their own ongoing price war, and can be on long-term price pressure on competitors formed.
Reason 3: oversupply
Excess production capacity, strong sense of vicious competition. Reduce production costs, technological advances led to the production of excess capacity, reduce inventory cost recovery, companies began to make a big fuss in the price. And many enterprises have failed to effectively do market research, failed to adjust business strategy, price competition is not necessary to do long-term development of the strategic plan, simply through the immediate difficulties, blindly follow the trend of the price you can drop me down, but with to a vicious melee entire industry. Weak market demand, the desire is not strong consumer spending, businesses in order to stimulate consumption and stimulate demand, the implementation of price cuts.
Reason 4: forced to fight
More SMEs in the actual operation of the market are forced to participate in a price war, because of their strength of enterprises, price policy, the extent of market regulation can not be compared with large enterprises, the result is often disastrous, the market fall, damage to business interests . Strategic response
LED led T8 tubes price wars throughout the industry about it? This is like a fierce war situation mutations spread has its own till the gates of the major companies, it seems unable to stay out of the discussion is no longer a war, but to decide whether war, how war proportions. In the past, Di Renjie Q: Yuan Fang, how do you see this matter. Today, Di Renjie estimated Q: Yuan Fang, how do you fight this war?
Deal with price wars, businesses can not stereotyped The price war will exist in every industry, just different manifestations. We can find that can set off a price war enterprises, often in large-scale production and management advantages, or in product technology and capital advantage, can further reduce costs or strategic operations.
On the other hand, the current LED lighting industry price war occurs only in the segment market circulation, which is a very competitive Red Sea market. As Deputy General Manager Chen lighting Sidon real interview with our correspondents said: “LED led T8 tubes tube down to less than 10 yuan, or more than 6 yuan, the price is quite normal, since over the years the industry invested capital, capital and capacity has exceeded the actual market demand, reduced demand because of the slowdown in economic growth, LED to replace the increased longevity, the demand for these two variables had a lot of changes, but China has so much production will need to digest this process companies do not take the initiative to meet the challenge, it’s probably no way out, when companies strive and work hard to grab, you may also find a way out. ” Not go for some terminal channels of distribution, but through the channels of professional engineering, commercial lighting product engineering specialty channels, the impact of a price war is not so large, and engineering, commercial channels of business, more emphasis on high-end product quality, emphasizing cost-effective products, just as general manager of country star power division Xu Zhenfeng said: “Faced with the impact of a price war, can not be generalized, the key is chosen by the channel approach channels such as doing lighting and commercial lighting channels, both yes. different, different products will go for different channels. similar lamps over other five-star Shangri-La hotel use, the price will not be cheap, but it will have its own unique charm, or angle, or the luminous efficiency and other aspects to advantage. Therefore, not simply because the product price war, went to evaluate the quality and application of product quality. “
How to focus on targeting the high and low prices
The pricing of their products, is made high or low standards, which must combine their strength and ability. For low-cost product positioning play, depending on whether they have the advantage of large-scale production, to seize the capital resources and other aspects. High positioning for play, depending on whether a company has the support of the appropriate quality, technology, and marketing capabilities. Low-cost tactics in the market is usually only play a “spoiler” role. In adversarial competition, high prices are often distracted or frightened cheap, but in the long term, low-cost always ends up face of high prices, even in the face of high prices suffered a crushing defeat.
We often find that the worst of the market, sales of goods, usually the lowest price of goods, unless there is an absolute cost advantage and product structure advantages, low price is no longer a conventional means of competition, but rather a strategic means of competition. Price and marketing activities carried out around the support price, constitutes a marketing system. Low or high, in fact, is the difference between selling and marketing.
Led tubes lights consumers to buy their identity must be built on the basis of the above product. This recognition comes from packaging, pricing, consumer experience, marketing, brand communication. After the market, in addition to the packaging and pricing of identity, recognition of the other way requires some marketing support.
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