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Many of China's companies are like natural athletes. Born with great potential but little thinking technique. They just jump into the field and start running, expecting spectators to cheer them on, confident that their own abundant energy will see them through to the finishing line. You get the sense there's no precision in anything. |
Perhaps this has to do with strategic marketing. Stage one is to make low cost products and win market share by low price. Stage two is to make higher cost products and earn higher revenue by higher price.
But what is happening is there is a gap between the end of stage one and the beginning of stage two.
This gap could be caused by a causal chain:
first, stage one low price is prolonged because global recessions have caused consumers to look for low price substitutes and China's products have been so successful in filling this role that the consumers are entrenched in their thinking that our products shall always be low priced;
which means that, second, the success with low price has erected a barrier in the mind of the buyer to buy from the same manufacturer a newer product at a much higher price;
so that not breaking this mental barrier is causing higher-priced products to be harder to sell - even if there has been remarkable improvement in the design and quality of the product which would more than justify the higher price tag;
a situation which is further compounded by the lack of proper branding campaigns and the neglect to see the product and its marketing process through the eyes of the consumer on the other side of the globe.
Take a simple example. Canned pork. When it was first exported, there was demand because you got a fair amount of lean meat in a tasty sauce, albeit with much oil and lard. You overlooked the poor design of the label which was not written to explain anything neatly to foreign buyers concerned about what they were eating. You stifled a chuckle at the length of the name of the company printed on the paper label, often torn by poor handling. The price was however low, almost a giveaway considering the cost of transport.
Now, years later, all the negatives are still around, the price has increased almost fifty percent but now mostly skin, fat, lard, the product quality has instead dropped fifty percent, and the name of the manufacturer has gotten more confusing with branch and city added to perplex the buyer as to whether it's from the same manufacturer that her grandma might have recommended years ago or is it a new company whose product quality needs to be tested all over again, especially with scares about hygiene in recent memory.
The time value of the product as formed in the mind of the buyer has not been considered. Supervision of how the product is perceived by the buyer has not been considered. How the product is displayed has not been determined. In addition, leaving the entire marketing exercise in the importing country to a few wholesalers without checking up on how they really mark-up the price and sell the product in the showroom or supermarket may also endanger the success of the product beyond just income earned, for good branding today makes sales easier tomorrow.
We need to repackage the entire approach so as to rebuild a more worthy belief in the product in the mind of the potential buyer.
Let me be more forthright. It is impossible for China not to produce a Toyota or Samsung. What's so special about them? Toyota's kanban and JIT systems are inevitable for any automaker needing to cut holding costs so that the company can invest in r&d to design how to integrate all the parts of the car together to give longer trouble-free and more seamless performance - thereby commanding the two questions of every mid-market motorcar buying decision in the world - dependability and maintenance.
Likewise, Samsung's marketing has been made airborne by global advertising. It has carefully studied competitors before it. Like Sony, Toshiba and Hitachi. Then it crafted its own global strategic development and invested in r&d and overseas centers, and bought new technologies to fill gaps in its products.
Likewise, Kia recruits a German designer to take the make to more streamlined models after realizing the mistakes of the old korean-designed 'transformer-type' models with sharp jagged lines.
For the same reason, BMW finally had to introduce more european streamlining of the american Chris Bangle's avant garde designs.
There are many other things to write on this topic but hopefully this post can spark sharper debate on how to push China's products to the top of the world. They deserve to be up there. And that's because i don't think the products of the others are that hard to make. Many of their parts are after all made in China.
By the way, this below is old and by a jp body on a kr company but you can read between the lines: