Group Purchase Marketing (團購行銷), as the name suggests, is a powerful marketing strategy that hinges on the power of collective buying to offer products at a price lower than their usual market value. This strategy has gained immense popularity, particularly in Taiwan’s consumer product sector, as it has proved to be an effective way of enticing consumers to make purchases at a discounted price. This article will delve into the nuances of how group purchase campaigns are organized in Taiwan, the dynamics of pricing and commission, and the pivotal factors that determine the success of such a marketing campaign.
How Group Purchase Campaigns are organized in Taiwan
Creating a successful group purchase campaign requires two crucial components: a Brand Advocate and a well-structured pricing strategy.
1. Brand Advocate
The brand advocate’s role is pivotal in generating consumer interest in the product. Brands need to identify suitable advocates who can promote their products effectively. These advocates are often influencers, known for their significant online following, or “group moms,” individuals known for their community connections.
Curious about who “Group Moms” are? Read our article: Group Mom explained.
The advocates disseminate information about the product through their unique channels. This might involve posting on their social media platforms, creating engaging content such as YouTube videos or podcasts, or leveraging the communities they have built, such as Facebook and Line groups.
2. Pricing & Commission
For group purchase campaigns, products are typically offered at a rate significantly lower than the market price, often around 30-40% cheaper. In return, the brand provides the influencer or group mom with a commission, usually within the range of 15-30%. Hence, it is essential for brands to devise a sound pricing strategy to ensure they can break even while still making the deal attractive for the consumers and rewarding for the advocates.
The Pivotal Factor in Group Purchase Marketing
Group purchase marketing, despite its success and popularity among brands in Taiwan, does not always guarantee the same results across the board. The determining factor often boils down to one thing: brand awareness.
Influencers and group moms tend to gravitate towards well-known brands as their followers are more likely to respond positively to such brands. This awareness also gives these brands a bargaining chip when negotiating terms of collaboration, such as lowering the commission rate. Some popular brands can even successfully launch a group order by offering minimal discounts or merely throwing in some free gifts.
However, for new brands without much brand awareness, here are 2 ways which can help them to gain a foothold in the market:
2 Ways for helping new brands to secure group order collaboration
1. Build up a favorable reputation
Before seeking group order collaboration, new brands should focus on ramping up their online visibility and building a positive word-of-mouth. This not only increases their chances of landing a collaboration for a group order but also makes subsequent customer service and returns from the group order more manageable.
2. Provide product samples
Another effective way of securing a group order collaboration is by providing product samples for the influencer or group mom to try out. Most influencers and group moms will only promote products they’ve personally tested and believe in. The trust and loyalty of their followers are paramount; therefore, they will only endorse a product if they are genuinely impressed by its effectiveness or benefits.
In conclusion, group purchase marketing is a potent marketing tool, especially when used strategically. By securing a reputable brand advocate, establishing an effective pricing strategy, and maintaining a high level of brand awareness, companies can leverage this approach to reach new customers, enhance brand exposure, and boost their sales in a competitive market like Taiwan. With the right tactics, even new brands can make their mark and thrive using group purchase marketing.