The whispers about next year’s economic turbulence are getting louder. You can see it from the headlines and the reality happening out there. For local businesses in Malaysia and across Southeast Asian countries, they speak of pain. They speak of challenges. They speak of hardships. With global headwinds stiffening, the consumer who walks into your store, or clicks on your website, is fundamentally different than they were years ago. They are safeguarding their wallets tightly, they are becoming more sceptical, and they are obviously distracted by the endless stream of cheap, imported goods flooding in from some countries.
The temptation for any local entrepreneur facing a sudden drop in sales is to slash prices. Please, don't do it. A price war is a battle you cannot win against entities built on an immense scale. Instead, elevate your relevance. To thrive, you must stop competing on price and start dominating on value perception and customer mindshare. You need to be creative when establishing your pricing structure. Here are the three fundamental strategic pivots you must execute now.
1. Sharpen your value from "nice-to-have" to "a must-have"
You see, when money is tight, the consumer has no patience for filler. If your product or service is viewed as a "nice-to-have," it's the first thing cut from the budget. Your strategic mission is to reposition that offering of yours so that it actively solves a painful, non-optional problem, a true teething problem that consumers, like it or not, must solve.
To execute this pivot, stop selling the features and start selling the avoidance of future pain. If you sell high-quality, locally sourced kitchen appliances, talk about how your repair network saves thousands in replacement costs when compared to a cheaper, disposable import. Market your item as ‘an insurance policy’ against future expenses. Furthermore, imported goods are generic; use this to your advantage. Does your local brand guarantee performance against the specific intensity of tropical sun or seamlessly integrate with local tax mandates? That specific, local guarantee is your non-negotiable solution, the gap that the imports cannot fill.
2. Be memorable. Win the "first right of refusal" through Marketing
People out there have an abundance of choices when they want to purchase things. A weak brand won’t be memorable in this situation. They will fail, become obsolete and experience a slow death. Your goal must not just be to be seen. It’s not enough. Your goal is to be the first name that surfaces when a need arises. Those people out there must think of your brand first whenever they want to buy those products or services that you also have. By winning that initial thought, you gain the "first right of refusal" and bypass the consumer’s instinct to start comparison shopping elsewhere.
Master the "one thing" rule: What is the single, most powerful trait you want to own in the customer's mind? Dedicate all marketing efforts to reinforcing that one promise. When that need arises, your brand will be the automatic, default choice. Importantly, those imported competitors are faceless, but your local business is human. Leverage your owners, managers, and artisans as the front line of your brand story. This connection is an emotional anchor, helping a consumer justify paying a little extra to support a person they know, rather than a corporation they don't.
3. The pricing illusion, mastering the tiered offer
Again, do not slash your price. Understand this. The key to being seen as reasonable or even cheap is to avoid letting the consumer directly compare your single price tag to the single, lowest price tag they came across online. You must create a creative pricing structure that subtly feels like a bargain when, in actual fact, it is not.
By default, you can present three tiers: Basic, Popular, and Premium. Price the Premium tier high enough to make the mid-tier look incredibly attractive by comparison; this is the anchor that validates the value of everything below it. Design the Popular tier to offer a disproportionately large amount of value for a modest price increase over the Basic tier, ensuring this is the option most customers select. Finally, have some Add-ons. These add-ons are sold separately. By clearly outlining the tiers and the add-ons, you give the consumer a rational, comparative reason to buy from you, which strengthens their conviction and makes them less likely to shop elsewhere.
The path forward
Next year’s economic cycle will be brutal. Only those businesses with real value will survive. The businesses that focus their marketing efforts on the above will be the ones that emerge stronger, more resilient, and truly dominant in the market.
