Page 186 - 100 Great Marketing Ideas (100 Great Ideas)

89 INTRODUCE A THIRD
ALTERNATIVE

People have many ways of judging value for money, but most of
us will tend to judge by comparing with other similar products.
Since price is also used as a surrogate for judging quality, people
often simply go for the middle price—they tend to assume that the
cheapest product is probably not very good quality, and also that the
most expensive one is too luxurious or not good value for money.
This creates a problem for companies with two products in their
range—which one will customers go for?

The idea

Continental AG is a German-based vehicle tire manufacturer.
It has a very substantial share of the market for tires fitted as
original equipment to BMW, Mercedes, and Volkswagen cars,
as well as supplying tractor manufacturers, truck makers, and
bicycle manufacturers.

For the general public, Continental supplies tires under its own
name and under the Uniroyal brand for the premium end of the
market, under the Semperit brand in the mid-range, and under the
brand names of the companies that fit tires. The result of this is
that customers will have at least three prices to choose from: few
choose the highest price, and equally few choose the cheapest,
so the Semperit brand has a very large share of the replacement
tire market.

In practice

• Decide which of your competitors poses the most competition.

100 GREAT MARKETING IDEAS • 177