TU-TESL

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No more glory. In spite of making a big profit on the terminal price, Audi still failed to resist and catch up one after another. As of October this year, Audi's terminal sales in China were 550000. After being overtaken by Mercedes Benz in 2017, Audi is now defeated by BMW again by 20000 vehicles, which is the first time Audi has fallen to the bottom of the top three luxury companies. Audi is under a lot of pressure from both the first camp and the second camp. The consumption upgrade is a big cake that many players come to snatch. The competition is extremely fierce. In order to keep its position, Audi made a big price reduction and promotion in exchange for the increase of sales volume. We know that the rigidity of the price often reflects the value of the brand from the side, and a large price reduction is bound to damage the brand value. Will Audi fall into the first camp when the incentive effect of price reduction strategy is exhausted? For Audi, "price for market" is a good strategy of dislocation competition, or drinking poison to quench thirst? Fast reading in 30 seconds: ● Audi attracts users through "dislocation competition + price reduction promotion" to ensure sales volume; ● price reduction strategy greatly damages brand reputation and seriously reduces brand premium; ● excessive promotion disturbs the price system, making channels very injured. Facing the competitors such as Benz and BMW, who have strong product and brand power, Audi has chosen to find a new way through price dislocation competition. In most of the market segments, Audi sets a lower price segment and uses the advantage of low price to enhance the market competitiveness of its products, so as to win a larger living space in the segment market with many powerful enemies and gain a higher share in the fierce user competition. The price advantage brought by dislocation competition has great attraction for consumers. They can experience the same level and high quality products at a lower price. However, users attracted by low price tend to be more sensitive to the price, while the value identity and loyalty of the brand are weak. In addition to competing at a lower price for products of the same level, Audi also strives to maintain a stable position in the market by virtue of substantial terminal discounts, which can be seen from the transaction price data monitored by car house. Audi's discount has always been the biggest among the top three luxury brands, and in this year's changing market environment, the price reduction has further expanded. The lower price and the higher preferential margin make Audi products have a considerable price advantage in the relevant competitive products. The advantage and attraction brought by low price can really impress many consumers. It is hard for brands to improve sales volume and reduce prices, and even produce dependence. Price reduction is like a powerful medicine, which can stimulate the sales rapidly, but "it's the third poison of medicine". A large price reduction can stimulate the sales in a short time, but it will bring about a far-reaching negative impact on the brand image and brand value. The "de" of Audi's price reduction strategy is not the year when Audi's products are launched intensively. Even since last year, Audi has been lagging behind Mercedes Benz and BMW in the launch of new products. New product launch, on the one hand, through upgrading, defect improvement and configuration upgrading, can improve product competitiveness; on the other hand, new product launch can increase product and brand exposure, and enhance consumer attention. But from the perspective of new product launch, Audi is obviously behind in terms of product upgrading or public opinion. In addition to being able to attract new products to the market, promotion strategies can also work. Audi knows the way. Through the big data of car home, it can be found that in terms of attention and interest, in recent years, the three brands of BBA are in a state of one after another, glued to each other, with a small gap. At the level of intention, Audi has obvious advantages and has been steadily higher than the other two brands. The increasing number of Audi leads shows that the higher discount margin attracts a large number of intended users, and more users consider purchasing Audi products based on price factors. The price reduction strategy is effective in improving the user's intention, which also explains why Audi's product launch lags behind, but the user's enthusiasm is higher. Although the overall sales volume (including) of Audi brand has been successively surpassed by Mercedes Benz and BMW, the current domestic sales volume has won by a small margin. The reason for winning is, of course, inseparable from the large discounts of the main models. In the market environment of sluggish consumption, if we give profits to consumers, we will naturally gain a group of users who are more sensitive to price. But the price reduction strategy is not once and for all, it is not sustainable, which can also be verified in the sales trend. From the sales data of chemical models, we can see that the compact and model sales accounts for more than 70% of the Audi brand. These main models stabilize the sales volume through substantial discounts, while also driving the brand to keep the market. But at the same time, we also see that in recent years, Mercedes Benz and BMW are gradually narrowing the gap with Audi, especially this year's sales volume of Audi is almost even by Mercedes Benz, which shows that the effectiveness of price reduction strategy is gradually declining. In addition, the difference between the number of high-speed wire ropes and the lower sales volume also shows that the offline turnover rate of Audi brand is relatively low. On the one hand, low price attracts users with low transaction intention, resulting in the consumption of marketing resources; on the other hand, it indicates that users are more likely to be intercepted by competitive products, and some users will turn to purchase common joint venture brand high-end models due to the simple matching of low price products. The price reduction strategy is not always used, but should be used carefully, and pay more attention to the brand image. The frequent "loss" of Audi's price reduction strategy will enhance the price reduction expectation of potential consumers, make the brand unable to establish a stable and effective price system, and at the same time, it will damage the owner's value perception of the brand. Audi's frequent price reduction and promotion have a great and far-reaching impact on the brand image and brand reputation. According to the customer based brand value (cbbv for short), although Audi has a higher degree of attention and intention, its brand reputation is far behind that of Mercedes Benz and BMW, or even less than that of the second-line luxury brand. As a brand that has been deeply cultivated in China for many years, its past glory has long been forgotten. It is obvious that Audi's high attention and more interested users are not based on users' perception and feedback of brand power, but more on price advantage. It will take decades or even centuries to build a world-renowned brand, and it only takes an instant to damage a brand. Enterprises should cherish their own feathers, formulate marketing strategies that need all-round consideration and can not produce path dependence. A brand with unstable price system and normal price reduction awareness in consumers' mind will make consumers more and more reluctant to pay for its high premium. According to the price area distribution data of clues, from the perspective of user intention, the amount of clues of Audi is mainly distributed in the price area below 400000, while the proportion of clues in the price area above 400000 is only more than 30%, while that of BMW and Mercedes Benz is 40% and 50%. This shows that compared with Mercedes Benz and BMW, Audi has a serious lack of competitiveness in the high price market with higher premium space, and its high premium products are not attractive to users. Similarly, from Audi's terminal sales structure, we can see that Audi's premium ability is weakening. According to the cumulative sales data from January to September 2019, Audi's sales are mainly concentrated in the compact and medium-sized markets, with a total share of 70%, while the sales of medium and large-sized and above models account for only 20%. In contrast, Mercedes Benz and BMW both have more than 30% of the sales of large and above models. The higher-level models have higher price and larger premium space. Audi's failure in the high-level market clearly shows that the premium ability of Audi brand cannot compete with Mercedes Benz and BMW, and more consumers are not willing to pay for the high premium of Audi products. Because of the lower price, there are more users overlapping between Audi's low price products and common joint venture brand products. It can be seen from the competition pattern that Audi has ranked the second in the number of brand comparisons. In addition to the fierce competition with luxury brands, Audi has more and more users competing with common joint venture brands. This part of overlapping users, who are uncertain, have weak value awareness of luxury brands and are easy to be intercepted by competitors, will also consume too much resources and energy in the actual sales process, and will further reduce the value space through mutual competition. As a sales front line facing consumers directly, channel undertakes a series of functions such as transaction transformation, transaction performance, service delivery, etc. A stable and efficient channel system is one of the keys to seize the market. Frequent brand price reduction stimulation is a great harm to the dealer price system. Audi's unstable price strategy will affect the sales rhythm of dealers and reduce the profitability of dealers, thus forcing dealers to reduce the cycle of stock up. In addition, under the pressure of competition, in order to achieve the sales target, the brand side will make great efforts to squeeze the inventory from the dealers, and the dealers will reduce the price to release the inventory in order to maintain the operation, thus forming a vicious circle, resulting in the situation that the price strategy is gradually out of control, thus affecting the stability of the channel system, and reducing the dealers' trust in the brand. It is believed that Audi can realize the negative effect of "channel war". After all, the vicious effect of interest hacking between Audi and dealers in 2017 is still obvious. To sum up and improve the sales volume and stabilize the market, we need to make a comprehensive consideration from "products, prices, channels, promotions" and other aspects, and make a beautiful combination. Price reduction promotion can only bring a temporary sales stimulation, which can not help the long-term development of the brand, let alone frequent price reduction without strategy, which will cause endless troubles. Audi needs to pay attention to the much criticized double clutch problem, the out of step pace of new product launch and market cycle, and the decline of brand recognition. If Audi wants to hold the position, it needs to make efforts in multiple dimensions from product strength improvement, brand power reconstruction, price system stability maintenance and channel confidence reconstruction, grasp user demand, provide more competitive products, make product cycle resonate with market cycle, at the same time, carry out more accurate marketing, and improve user's goodwill and value cognition to the brand. Recently, Audi released e-tron, which is highly concerned by the market. I hope this is a good start for Audi to explore new fields and improve its product strength! After all, in the face of the suppression of "BB" and the rise of second-line strong brands, the road ahead of Audi is very difficult to go!