PRODUCT PACKAGING IS NOT FOR OUTRAGEOUS INCREASE IN THE UNIT PRICE OF PRODUCTS

By Nnabugwu Chizoba

Dear All, entrepreneurs and start-ups in particular,

Did you read our first piece entitled entrepreneurship skills development: beyond public speaking? Do you still recall what we discussed, the issues raised?

Never mind, let me update you. Our focus was the use of motivational speakers as entrepreneurship skills development Consultants and trainers. We identified the federal, States and Local governments, their Agencies, boards and parastatals, groups, organizations and individuals as the culprits.

We stopped at the point we asked you to ponder over the issue presented. Please click herehttp://www.belfordscorelines.com/2019/04/entrepreneurship-skills-development.html for the previous piece.

The issue: A product that sold as low as N150.00 (one hundred and fifty Naira), sales at N850.00 (eight hundred and fifty Naira), after improved packaging. Another that sold for N5.00 sales for N35.00, for the same reason. This was cited as benefit entrepreneurs derive from improved product packaging.

My words to you: This is one easy way to destroy your business and close shop.

Likely reactions from most of you: What do you mean; why did you say that? Though I prefer how?

Why the reaction? You just read a motivational/inspirational story. Mine is not. The difference.

Caution: One thing you must guide against, is pricing yourself out of the market. Frankly speaking, the essence of improving your products, through packaging is not to outrageously increase the unit price of your product. Such radical increase is not only harsh to the customer but kills your business. 

The idea behind products packaging is not to weaken, reduce or drastically decrease, the purchasing power of your customers. It is not also aimed at putting your products off the reach of your customers. If anything it should be treated as providing an opportunity to appreciate the customers for their patronage, and returning part of the profit to them that in the first place made it possible.

Another way to look at it, is to view your improved product packaging as a means to attract, entice and retain customer loyalty; and to continuously migrate buyers into repeat customers and referral agents. Your major interest should be deeper penetration, expansion, and market development. 

Instead of being myopic or parochial, and getting engulfed in the sentiment that a very wide margin from unit selling price of your product will catapult your business to Eldorado, I urge you to focus efforts at widening or increasing the market share of your product. This will mean striving to ensure that more people patronize your product, so that marginal contributions by many, rather than few, become your target. Packaging right has the potency to deliver this result. Thinking the other way is tantamount to setting yourself up for a sucker punch, crash landing and business failure.

  

Don’t make the mistake of thinking and behaving as if the customer is father Christmas, kind and caring. In reality, the customer is rash and unforgiving, cares and values self so much; and is always ready to repay you in your own coins. 

Remember, switching to new products or substitutes is second nature to the customer. Note, the competitors are always waiting to strike. Outrageous pricing provides the opportunity. 

Remain blessed till I come again, ciao …