In the past six months, I have encountered several products from Czech and Slovak companies that are of very high quality, but their prices are disproportionately low. This seemed strange to me, so I began investigating the causes.
On one hand, we have many successful products and brands that are not afraid to command high prices. In this group, I would mention Kofola, Alza, Škoda Auto, or Crocodile baguettes. The reason is immediately apparent – expertly executed marketing. None of these brands compete with low prices. Alza has long ceased to be the cheapest e-shop, Škoda Auto is priced in the middle of the price spectrum and targets the middle class. Here, shareholders understood the power of marketing and thanks to it, they can afford to sell cars at high prices.
On the other hand, there are products and companies that barely work with marketing. Or if they do, it is completely inappropriate. I prefer not to name these companies, as I would not want to offend anyone. One example: A few years ago, there was a radio advertisement for baguettes with the slogan: “You don’t have to be a cannibal to talk to your baguette.” I immediately wondered what they were trying to say. Eventually, I understood that they weren’t trying to say anything at all, but it rhymes. This particular company was later acquired by another large company that understands marketing, and today the baguettes are a beautiful product in attractive packaging with a modern name.
Another example is company XY, a large manufacturing enterprise – they have unique technology that only they and one other factory in the EU possess in Europe. They have a newly equipped production line, sophisticated quality control, and sell their product at a retail price of around €8. A competing company from Austria sells a comparable product for €50 (!!!) yes, you read that correctly! The factory largely produces premium products for competing companies from Western Europe, which then sell them for tens of euros. My immediate question to the shareholders was – why do they sell their products so cheaply? After all, they have the same quality production line as their competitor. They are afraid. They believe that their competitive advantage is price.
Czech entrepreneurs and manufacturers don’t believe in their products. A high percentage of them underestimate the power of marketing, and their only sales strategy is low price. They are afraid to price their products properly, afraid to build a premium European-format brand, afraid to sell at high prices. Their business thus often stagnates, profit is susceptible to decline as input costs rise.
We have had several similar assignments, and our answer is: a marketing interim manager can help! Our goal is to convince Czech manufacturers to value their work and price it appropriately with the corresponding price. Czech products deserve quality marketing and a well-developed product.
