"President, Wind and Rain's latest entry-level DV had sold more than 100,000 units!"
"What did you say? It's not even a month, and the sales had exceeded 100,000 units?! Didn't we expose the shortcomings of that model on the media?! "Norio Ohga was shocked. This is different from what he expected.
After knowing that Wind and Rain had introduced a low performance mini DV, he asked his men to evaluate the specs of this DV. After that, he attacked this DV in the newspapers, magazines, etc., criticizing this DV's shortcomings.
But Norio Ohga had forgotten one thing. His attacks were targeted at professional magazines and newspapers, but the consumers who bought this entry-level DV are not professionals. They are only ordinary consumers.
To them, the advertisements on TV are good, and it's still Wind and Rain, which is considered a big brand. When they tried out the DV, it looks good, and the prices are reasonable. That's why they bought it.
Some consumers, who had wanted to buy Sony, Panasonic, etc. products, were tempted when they saw Wind and Rain's low prices. After comparing the prices, they realized there is not much difference.
Also, the salespeople had told the consumers that digital products can be upgraded very fast, and a new model might have a revolutionary breakthrough in three to five years. That's why they don't need to buy the best model and should buy the most suitable model.
Just like this, Wind and Rain's DV sales increase, while those Japanese consumer DV brands are struggling to sell.
Furthermore, Philips, Thomson, etc. had started their promotions in the consumer market, and the Japanese companies are struggling to cope.
"They did not advertise. How come they are selling so fast?"
"They are advertising on the internet, and they are focusing on the low prices. They are also advertising on all kinds of online shopping channels to attract many consumers. Just the sales on Amazon and other online shopping platforms are very high, and the number is still increasing. "
Feng Yu does not only have retail outlets, but he also has online shopping platforms. Just Amazon, Taobao, Polar Bear eCommerce, etc. have many registered users, and there are other smaller eCommerce channels. The sales on these channels are even higher than the retail stores.
Feng Yu was not afraid of anyone when it came to retail channels. Even a retail giant like Wal-Mart doesn't have better channels than Feng Yu.
Most importantly, the global economy had been affected by the US financial crisis in the past two years, and the global economy had been in a slump. Such expensive products were not easy to sell. This cheap Wind and rain brand just happened to fill the gap in the market and satisfy the needs of consumers. It was not surprising that the sales were good.
"At Christmas, they launched a low-end phone with a black and white screen. How many did they sell?"
Norio Ohga suddenly had a bad feeling. Could there be a market for these cheap goods?
"We haven't looked into it yet. President, it's only been a week. How many can we sell? "
"Don't let your guard down. Get someone to investigate this. If this low-end model is really selling well, then Sony Ericsson will also introduce a model to compete with them!"
"President, this phone is only priced at 49 US dollars. How much profit can there be? 49 USD, how could it still be a phone? If we introduce this phone, people will look down on Sony Ericsson. "The assistant was shocked.
"When everyone on the streets is using our Sony Ericsson phones, will people look down on us? If we can sell a few million units, even if the profits are only 2 to 3 USD per unit, we will get tens of millions of USD in profits. "
"President, it is not worth it for us to do this for just tens of millions of USD." The assistant replied.
After all, Sony Ericsson owns Sony Ericsson's shares, and about half of the profits will be given to Ericsson. That means there will only be a few million USD in profits, and after deducting the R&D and marketing expenses, how much will be left?
Also, this low-end phone will have a significant impact on the brand. Sony Ericsson's market share was dropping, and people will think that they are going to focus on low-end phones.
Norio Ohga was also hesitant. He also has the same concerns as his assistant.
"Alright. Tell the rest to hold a meeting with the higher management in an hour. We will discuss if we should enter the low-end market."
… …
"General Manager Feng, we did not expect our mini DV sales to exceed 100,000 units in less than a month, and the response from the market is good. Although the profits had dropped, our sales had increased, and our market share had increased. This will be good for our future product marketing. "Xu Lihua reported to Feng Yu.
"What's there to be happy about? I think this low-end mini DV's sales will exceed 5 million units!" Feng Yu raised his palm and said.
"How much? 5 million units! How can it be so high? "
"Why not? You had also said that the sales are increasing. In the future, we can lower our production cost, and we can lower our retail prices or give out some free gifts. This will increase our sales. Also, don't forget that after we settle the cities' market, we can also enter the villages' market. Although the Hua Xia market had been given to Aiwa, overseas markets are also divided into cities and villages. Don't tell me those villagers don't want to buy mini DV? "
"I understand. I will ask them to increase their marketing efforts in the less developed countries. If we can capture these markets, our future sales will be high."
"Have those Japanese electronics companies introduced low-end mini DV?"
"Not yet. Philips and Thomson also have no intentions of entering this market. Seems like they are worried that this will lower their brand's value."
Feng Yu's lips twitched. Philips might have a few hundred USD razor blades, but they also have razor blades that are less than 10 USD. Products with different prices targeted at different consumer groups. What was wrong with that? As long as the product's positioning is clear, there is no need to worry about the marketing.
"It's better for them to give up. We can monopolize this market."
"General Manager Feng, this might not be the case. Although those Japanese and European electronics companies are not producing mini DV, some smaller manufacturers are still producing it. Their retail prices are about the same as us, and the performance is about the same. "
"It's fine. They do not have better distribution channels, and their sales will not increase. That's why they will not get any profits. Aren't our costs still decreasing? In a few months, we'll lower our prices again, and we'll be able to drag down a bunch of them. As for the rest, aren't we going to continue expanding? I think we can buy them over and turn them into our factories! "
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