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How should agricultural companies deal with price wars?
[ China Agricultural Machinery Industry News ] In recent years, in the agricultural capital market, all enterprises have been trapped in the quagmire of price wars, and even many enterprises have transformed and adjusted their development plans. Under such a phenomenon, how should agricultural companies adjust their responses?
How do agricultural enterprises face price wars?
First of all, for the price war, many people often have misunderstandings. When it comes to price wars, there is a sense of price in the consciousness. How to fight for price and what kind of purpose is achieved through price wars, many people know more, but I don't know why. Therefore, in order to better use the price war to serve the market and enterprises, we must eliminate the one-sided understanding and understanding of the price war, and thus establish a practical system of reasonable price wars.
Generally speaking, the price war is a normal market competition means adopted by the seller in order to occupy the market. As a primitive marketing strategy, the price war is popular among the majority of agricultural manufacturers because of its many advantages such as strong lethality, shortness and quickness. use.
As a means of competition, it has no good or bad points. The different uses of different manufacturers and different purposes, the results and effects are very different and even very different. However, the agricultural capital market is now in the buyer's market stage. At the same time, it is restricted by various links in the upstream and downstream. A large number of agricultural capital manufacturers have already considered the price war as the sole marketing means without fully considering the actual situation of their own enterprises. The market is becoming more and more chaotic.
So is the price war good or bad? In fact, all price wars that contribute to environmental purification, benefit the development of the agricultural industry, are conducive to corporate competition, and achieve strategic realization to achieve a win-win situation are good price wars. On the contrary, those low-cost dumping, opportunistic, and disruptive market order A price war without strategic significance is a bad price war. The price war is a sharp "double-edged sword" that can hurt others and hurt yourself.
The status quo of price war in agricultural capital market
When similar manufacturers in the market begin to adopt price reduction as a means of competition, enterprises should not blindly adjust the price of their own products due to the loss of part of the market share. The key to starting a price war in such products is the planning and resource allocation of the company's own development.
In the current agricultural capital market, as a large-scale agricultural capital producer, the price war is opened. For the strategic planning of the enterprise itself, it is generally used to crack down on competitors and adopt small profits but quick turnover. Even some agricultural enterprises have to The competitors completely squeeze out a certain category of competitive market to rely on their own resource strength to sell goods below the market average price, thus achieving a monopoly position or an oligopolistic market.
Small-scale agricultural production producers, due to the low entry threshold of the industry, lack of affiliation to the industry, and no enterprise development plan that matches the development of the industry, and even many small business leaders hold the idea of ​​short-term operation, without lower limit. The price of the products has made the situation of the less-order agricultural resources market more chaotic.
After all, price war is an inevitable law of normal market economy development. One of the typical concrete manifestations of product competition is price competition. Although price war itself is an inevitable outcome of market economy behavior, it is a product that is out of added value. Performance is a phenomenon of regression, which is essentially barbaric and violent, and is contrary to market behavior.
How to deal with and fight the price war?
When manufacturers of similar products in the market start to take price cuts as a means of competition, we cannot avoid being affected by them. So how do we deal with them? Usually we have two options:
Avoid price wars, differentiated operations
Avoiding price wars is not without participation. It is necessary to take a certain strategy to defend.
As far as defense is concerned, the good short-term strategy is to give concession to the competitors part of the market share, and actively manage this process, as far as possible to reduce corporate losses, as a competitor, if repeatedly reduced sales, then its losses far greater than the defensive side. While defending the price war of competitors, it is more important to adopt a differentiated strategy to re-segment the market, open the level of competition with competitors, and differentiate the survival. This process is a rigorous and professional process, and it is also the only way for the development of agricultural enterprises.
The performance of differentiated figurative is the brand differentiation positioning. With this, we can solve the selling points and differences that can be provided to the salesman in addition to the low price of your products. Can these product selling points and differences form sales? What can your product bring to dealers in addition to low prices? Can you come up with a product marketing plan that allows dealers to use the product to gain market share and earn profits?
In addition to low prices, your products can give retail stores which sales support, whether it is placed in the store, or will it be tested and demonstrated, and carry out a series of marketing activities such as observation meetings, farmers' meetings, technical seminars, product store promotions, etc. In addition to low prices, your products can add value to farmers (planting large households, cooperatives), whether they can solve the problem of pests and diseases, increase the output of others, increase the income of users, and let users get the satisfaction after using the products. The sense of well-being, and so on, is actually a sales problem.
Positive response, rational planning of product portfolio
Using price as the main means of product circulation can only be called sales, not marketing. Marketing management expert Liu Chunxiong said that sales sell products through price, and marketing sells prices through products. The phrase breaks the essence of the operation of the agricultural market today.
In the past, agricultural enterprises were trying to sell, ignoring the importance of operations. As far as product managers are concerned, most companies do not have this position. The person responsible for this function is generally the person in charge of the enterprise. The job, the user experience, and the product innovation combination are the bosses. Can you focus on it?
A farmer's product generally goes through the transition from innovative products to functional products to low-end products. The symbol of innovative products is to be at the forefront of the market and fluctuate with the fluctuations of the economy.
This is a normal evolution of agricultural products. In this process, if enterprises want to develop, they must carry out moderately innovative agricultural product development to seize the opportunity of economic growth. At the same time, they must also maintain certain functional products to withstand the impact of economic fluctuations and timely detect low-end products. Can exist, whether there is the possibility of being eliminated, so as to make asset realization decisions.
The price war in the agricultural industry will continue for a long time. Therefore, as a farmer's producer, it is necessary to reasonably guide, scientifically build, and benefit from it, so as to develop in a direction favorable to the company.