YM778.TV Chapter 1328 - Sudden surge in sales
“What did you say? It’s not even one month, and their sales exceeded 100,000 units?! Didn’t we expose that camera’s issues on the media?” Norio Ohga is shocked. This does not want he had expected.
After knowing Wind and Rain had launched a low-performance handheld DV, Norio Ohga got his men to release the test data and pointed out the DV issues to the media.
But Norio Ohga had forgotten one thing. They are using professional magazines and newspapers to attack this product. The ones who will buy entry-level video cameras are not professionals and are ordinary folks.
Most consumers will be influenced by advertisements and Wind and Rain’s brand. They will test it and will buy it if the price is reasonable.
Some, who had wanted to buy Sony, Panasonic, etc. products, saw Wind and Rain’s low-priced video camera and made a comparison. They found there’s not much difference and picked the cheaper one.
The sales assistants have also played a part. They told the consumers that digital products would be outdated very fast. A new product might be obsolete in three to five years, and there’s no need to buy the best. Just get the most suitable product.
Furthermore, Philips, Thomson, and other companies started promotions for their consumer-level products against the Japanese companies.
“They have not started any advertising campaigns. Why are their cameras selling so fast?”
“They are advertising online, and their focus is on the price. They had also promoted their video camera on shopping channels which attracted a lot of consumers. They have sold a lot on shopping websites like Amazon, and this figure is still rising quickly.”
Feng Yu does not only have retail stores. He also has a powerful sales channel, eCommerce websites. Look at the number of registered users on Amazon, Taobao, and Polar Bear Online shopping websites, which does not include other smaller online shopping sites. Online sales are much higher than retail sales.
Feng Yu is not afraid to compete on sales channels. Even a retail giant like Walmart does not have better sales channels than him.
Most importantly, the whole world was affected by the US financial crisis two years ago, and most consumers had cut their spending. Expensive products are not selling now, and this cheap product from Wind and Rain happens to fill this gap to meet the market demand.
“They had introduced a cheap black and white screen mobile phone during Christmas. How many units have they sold?”
Norio Ohga suddenly has a bad feeling. Do these cheap and low-end products have such a big market?
“Err... we don’t have the figures. But it’s only been a week. How many can they sell?”
“Don’t take it lightly and got someone to find out. If this low-end phone is really selling well, then we must also introduce one to challenge them!”
“President, that phone is only selling for 49 USD. How much profit can they make from it? Is that even consider a mobile phone? What will people think of Sony if we are going to introduce phones in this range?” The assistant is shocked.
“Do you think people will think lightly of us when everyone on the streets is using our Sony phone? Even if the profits for one phone is 2 to 3 USD, we can get more than ten million USD profit if we sold a few million units.”
“But it’s not worth the effort for ten million USD profits.” The assistant disagreed.
After all, Sony owns Ericson shares, and they must give half of their profits to them. The profits will only be a few million USD, and how much is left if they deduct the marketing cost?
Also, this low-end phone will affect Sony’s brand image. Sony’s mobile phone market share had been reducing, which will let people think they will focus on the low-end market.
Norio Ohga starts to hesitate, and he also has the same worries as his assistant.
“Alright. Notify the rest of the higher executives to have a meeting in an hour. We will discuss if we should enter the low-end market.”
.......
“Manager Feng, I didn’t expect our DV sales to exceed 100,000 units within a month, and the market feedback is quite good. Although our profits are lowered, we increased our market share by a lot. This will have a good impact on our future products.” Xu Lihua reported to Feng Yu excitedly.
“What’s there to be happy with just 100,000 units? I expect it to exceed 5 million units!” Feng Yu showed his palm.
“How many? 5 million units?! How is it possible?”
“Why not? You also said our sales are continuing to rise. When we can lower our production cost further, we can also lower our retail prices. Also, don’t forget that we can enter the village markets after we conquer the cities’ markets. Although Aiwa is in charge of the Chinese market, overseas also have cities and villages. Are you telling me those overseas villagers don’t want to buy DV?”
“I understand. I will get them to increase their marketing for the less developed countries and try to gain control of these markets.”
“Have those Japanese companies introduce low-end DV?”
“Not yet, and Philips and Thomson have no intentions of entering this segment. It seems they have some hesitations and are afraid it will affect their brand image.”
Feng Yu smacked his lips. Philips also has shavers ranging from a few hundred USD to ten USD. Products with different pricing are targeting different segments. What’s the problem with it? As long as the product is positioned clearly, there’s no need to worry about all these.
“It will be terrific if they want to give up this market segment. We will dominate it ourselves!”
“Manager Feng, although those big brands from Japan and Europe are not producing this low-end DV, some smaller manufacturers are. Their retail prices and features are about the same as us.”
“It’s fine. They don’t have good sales channels. Without good sales channels, their sales will not go up, and they will not make much profit. Our production cost has been lowered further, right? We will lower the price in a few months and push some of them out of business. As for the rest... we are continuing with our expansions, and I think we can acquire them to be our factories!”