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low to fight a price

28th May 1983, Page 17
28th May 1983
Page 17
Page 17, 28th May 1983 — low to fight a price
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Which of the following most accurately describes the problem?

GHTON was the venue for most important week in the nova! industry's 1983 endar — a week which led with the Fidi annual ference and was followed by British Association of novers own yearly gathering le p1.8), reports MIKE rHERFORD.

idi — the Federation of :ernational Moving ,ociations — last held its ference in Britain in 1955. hough it has taken the oration almost 30 years to an, the wait was worthwhile. highly impressive array of :akers was there, among m Gerry Lane of Lane Moving I Storage of the Philippines o chaired a session entitled lning The Price War.

vlr Lane opened the ussion by admitting that the iovals industry tends to be overted and has much to from its colleagues in other Messes.

rom Ansley of Elliott emotional, Johannesbourg )ke in general terms and gave ne sound advice which any mpany in the transport ustry would do well to listen The theme of Mr Ansley's mch was simple: "Be profit nded not volume happy."

'-'ompetition, said Mr Ansley, )ssential if a company is to do good job. Opposition ourages and stimulates such company into providing a tter service, he said.

Vlr Ansley also had some rang ideas about how tential customers should be ated. When quoting a price for a job it is rude and impertinent to ask a client who else is quoting, he said.

"By asking a customer that we're telling him that we're not sure of ourselves. We'll possibly even encourage him to get another quote."

It is vitally important to understand the mentality and thinking of the customer. Among other things companies should realise that, contrary to popular belief, the price is not necessarily the most important factor in the customer's mind.

"The lowest prices are not always the most attractive. Sometimes the highest price attracts the client because the client can relate to the high price. His consideration of price is way below his desire to eliminate risk.

"Don't let people start totally unproductive price wars. It's about time we do business on our terms. We can only do that with strength, fortitude and guts."

The real challenge, said Mr Ansley, is to sell consistently at prices higher than those offered by the opposition. Mr Ansley summed up by telling delegates at the Fidi conference to bear a few important factors in mind during a price war.

"Study the battleground, market customer needs, assess the standard of service, know and understand the competition, define the types of service to be provided, set a level of prices, and get the right people. Then we can take our profits to the bank."

Colin Gordon from Movers International, Mississauga, Canada, amused and entertained delegates at the conference. "Trying to make a profit today is like being a pick pocket in a nudist camp — it needs creativity and ingenuity!"

Mr Gordon does not subscribe to the view that as long as some profit is made a job is worth doing. That formula simply leads to a slow, overall lowering of price levels. His advice is to use objective and minimum prices. "There is no virtue in selling at the wrong price."

But, said Mr Gordon, prices can be reduced during unsettled economic climates — providing that operating costs are also reduced.

"Reducing prices in hard times is a valid option. But if prices are reduced costs must be too."

And one of the costs that can be reviewed, suggested Mr Gordon, is a company's wage bill.

"Don't get hooked on salary levels as sacred cows. They can go down. Employees can then share in the ongoing excitement of survival."

One of the other areas for cost savings is in advertising expenditure. But Mr Gordon warned that advertising should not be cut when money is tight.

His views about training were equally strong. "If you think training's expensive try ignorance instead. Now is the time that you need a lean, fit, motivated team that is ready to run."

Day two of the Fidi conference started with a talk by John Burder, director of Sorel International. The subject was audio-visual aids and how they can help companies to sell their products.

And he reckoned that a company would probably have to pay no more than about £16,000 for a professionally made, 20 minute film which can then be transferred to individual video cassettes (or anything else) for distribution to potential clents.

The final session at the Fidi conference was essentially a political one. Entitled "Multinational movers — are they here to stay?" the session centred on the question of whether multinationals should be allowed to become Fidi members.

Tags

Organisations: Fidi
Locations: Mississauga

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