Sony's marketing manager did not know that when his dormitory was deciding on how to deal with this issue, a meeting regarding Daqian was going on in Sony's highest meeting room.
This was not a normal meeting. It was a meeting of Sony's board of directors. Almost all of Sony's board of directors and shareholders were present at the meeting. The topic of discussion was Daqian Group.
The meeting was chaired by Sony's Chairman and CEO, Nobuyuki Idei.
"Dear directors, we are gathered here today to answer your questions about the company's operations. Secondly, we are here to discuss how to deal with our new competitor!" Nobuyuki Idei started the meeting. "First, Mr. Miyauchi Yoshihiko will speak. He will represent all of the directors to ask a question!"
"Everyone!" Miyauchi Yoshihiko stood up and looked at all of the directors. "Today, I will represent all of the directors to ask a question. Why is Sony, the inventor of VCD and the first company to commercialize VCD in 1982, the first digital CD player, CDP-101? Why is Sony lagging behind in the VCD market? Why is Hua Xia taking over the market? What is going on?"
"Why is it that Sony, the pioneer of optical discs, did not develop a VCD player first? Instead, we let a Chinese company take the lead?"
When Miyauchi Yoshihiko finished his question, many of the directors were unhappy.
Indeed, Sony was the one who started the commercialization of VCD players.
When the optical disc was first developed, it was used as a storage device for music CDs. Since 1975, Sony had been researching on optical discs and storage devices. In 1982, Sony developed the world's first CD player, and it was the first CD player in the world.
But Sony's directors did not expect that Sony, the pioneer of CD, was lagging behind in the VCD market. Now, the entire VCD market was taken over by Daqian.
According to the information received by the directors, the number of Daqian VCD players had exceeded 1.5 million households, and the number was still increasing to 10 million. Sony had been selling VCD players for their whole life, but they had not sold more than 10 million units. This was too scary.
"The situation is like this. Actually, in 1991, when the RM agreement was introduced, Sony had started to research on the VCD player. We even had the design drafts!" Nobuyuki Idei stood up and looked at the angry shareholders in the meeting room. He could only sigh.
At the same time, a blueprint similar to a modern VCD player appeared on the projector behind him.
"However, after our market research, our colleagues in the marketing department felt that there was no value in developing the VCD. Therefore, the company temporarily shelved the development of the VCD until now!"
"Haha, that's strange. VCD is such an epoch-making product. Why would the marketing department think that it has no development value? Could it be that the people in the marketing department grew up eating sh * t? Miyauchi Yoshihiko asked angrily.
"No. The marketing department had conducted a detailed investigation and came to this conclusion!" Nobuyuki Idei replied. "At that time, the marketing department had conducted a detailed market research of 20,000 people."
"They interviewed 20,000 consumers and asked them if they were willing to buy a VCD player for 200,000 yen. At that time, more than 98% of the consumers rejected the suggestion to buy a VCD player!"
"This is because our market had been taken over by the VCR. Every household is using a VCR. Although the picture quality and sound quality of VCD players are better than VCR players, but the difference is not too big. Also, VCR players have the ability to record videos, which VCD players do not have. "
"VCR players can record the programs that are being broadcasted on TV onto the video cassette. But VCD players cannot. If they add the ability to record videos, they will need to increase the cost by 1.2 million yen. This is not something that the market will accept!"
"At the same time, the price of a VCR isn't cheap either. A normal VCR costs as much as two hundred thousand yen, and a high-end VCR costs as much as four hundred thousand yen. If you ask a family that has already bought a VCR to spend another sum of money to buy a VCD player, it's obviously unacceptable to the consumers!"
"Lastly, and this is the most important point. Sony is one of the biggest VCR manufacturers in the world. We own 28% of the VCR market in Fusang. If we push VCD players, we will lose a portion of the VCR market. So, at that time, the marketing department thought that there was no need to replace the VCD player with the VCD player, because we can also make the same profits by selling the VCD player! "After Nobuyuki Idei finished speaking, the meeting room became quiet.
Actually, the last point was the most important. Who would want to ruin their own livelihood?
The people sitting in this meeting room were not idiots. They were all smart people. That's why they could understand Nobuyuki Idei's explanation.
Understanding was one thing, but reality was another. The reality was that Sony was a fool and had made a big mistake. This was because Da Qian had asked the 1.5 million Japanese to change their VCRs to VCD players.
"Then why is the Daqian Group able to do something that we cannot do?" Miyauchi Yoshihiko asked.
"I think it's mainly because of their marketing policy. It's really a policy that's both genius, bold, and terrifying!" Nobuyuki Idei sighed. "Based on our research, the Daqian VCD players are priced at 300,000 yen each. But they are selling the VCD players at a monthly fee of 2,000 yen. This way, the consumers will not think much of the VCD players. It is no different from buying a game cartridge. There is no need to worry about the cost of replacing the VCD players. "
"At the same time, the Daqian Group is actively promoting their VCD content strategy. They had recorded a large number of VCD players, and these VCD players contain a lot of interesting content. It's different from TV stations. With VCD and CD-ROM, the audience can watch the content they want to watch anytime and anywhere. Also, the cost of CD-ROM is much lower than videotapes. This allows the audience to buy CD-ROM in bulk and get more content. "
"With these two factors, the VCD players are selling well. That's why I have to admit that our leaders had made a mistake in our marketing strategy. We did not come up with such a creative and effective marketing strategy. This is our biggest mistake! I am willing to take responsibility for this mistake! "Nobuyuki Idei took responsibility for this mistake.
"Mr. Chairman, please don't misunderstand. Our meeting this time is not to determine who is responsible, nor is it to determine who should bear the responsibility. We just want to clarify the whole situation!" Miyauchi Yoshihiko quickly said.
Sony was still doing well under the leadership of Nobuyuki Idei. Their financial reports were good, and Miyauchi Yoshihiko and the other directors will not panic and remove Nobuyuki Idei from his position. They were clear about their relationship with Nobuyuki Idei.
"Then, Mr. Chairman, if we do not interfere with the Daqian Group, what do you think will happen to the Daqian VCD player market?" Miyauchi Yoshihiko asked.
"Gentlemen, after three days and three nights of deductions and calculations, our leadership has finally come to the following conclusion!" Nobuyuki Idei cleared his throat and said. "We think that under ideal circumstances, without any interference from the Daqian Group, the Daqian VCD players will replace videotapes. All 27.23 million Fusang households' videotapes will be replaced by the more advanced VCD players. The Daqian Group will occupy all 27.23 million households' TV sets."
"What are the consequences of this?"
"Let's not talk about the profits from selling the VCD players. More importantly, the Daqian Group will have full control over all the households' TV sets."
"This is because the Daqian Group had promoted Guangying Supermarket together with the VCD players. In the eyes of the higher-ups, Guangying Supermarket is more valuable than the Daqian VCD players. This is the most important aspect!"
"Based on our research, the Daqian Group had signed contracts with 78% of China's cultural companies. These cultural companies had started to record their cultural products on VCDs and put them on the shelves through Guangying Supermarket. After that, they will split the profits with the Daqian Group."
"In this way, the Daqian Group will be able to control the entire cultural market through Guangying Supermarket, forming a complete monopoly!"
"Let's give you a simple example. Imagine that there is only one brand of supermarket and one brand of convenience store in Fusang. This brand and company will control the entire country's retail platform. All the manufacturers in the country will have to get the approval of this company before they can sell their products on the shelves! How terrifying would this company be? "
"Then, this situation will happen. The CEO of this company will only need to say one word, and a food company with more than ten billion yen's worth of capital will be cut off from all sales and close down!"
"As long as the CEO of this company says one word, a toy company that was established less than two days ago will become the leading company in the country."
"In the end, if this CEO doesn't like green peppers and orders all the supermarkets and convenience stores in the country not to sell green peppers, then the people of the country will have to follow him and change their eating habits. They won't even be able to eat green peppers!"
"I believe everyone here can understand how terrifying such a company is!" Nobuyuki Idei's words made all the directors shudder involuntarily.
Although they didn't like green peppers, their children had to eat them!
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