The industrial automation business typically markets higher priced products in low volume.
In my opinion, this is simply a mindset. Growth and expansion into other related higher-
volume markets have been inhibited because of reluctance to change the ground rules. The
fear is that new markets have different cost structures and sales channels that take time to
develop. And in a flat or declining economy, everyone seems to be too busy staying afloat
to consider new avenues of growth.
Low-priced, high-value, high-volume products can indeed generate healthy margins. The
key is to market a balanced value proposition. The problem is that no one wants to break
price barriers because of the mindset that lower price means lower margins. So, everyone
continues to market products at established prices to meet the business plan—the self-
fulfilling prophesy of low volume.
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