lerbook Chapter 47 Brand Strategy
Chapter 47 Brand Strategy
The conference room at Xinghuo Electronics Factory.
The air was thick with the pungent smell of cheap tea and cigarettes. The long conference table was full of people: Ling Yun sat in the main seat, looking calm; Ma Baoguo's face was flushed, with the stubbornness of an old worker; several senior technicians from the technical department had their brows furrowed; the purchasing and finance managers looked slightly uneasy; Li Mo was also present as an observer, with his notebook open in front of him.
On the table, several research reports faxed back from Beijing, Shanghai, and Guangzhou were scattered about. The paper was rough and the handwriting was a bit blurry, but the data and information on them were like a ball of fire, burning everyone's nerves.
Ling Yun looked around and tapped the table: "Everyone's here. Zhang Bin, you guys have done a good job running around. Tell everyone the details of what happened, no embellishment, just the facts."
Zhang Bin, who was in charge of the Beijing team, cleared his throat and spoke first, his voice still carrying the fatigue of his journey: "President Ling, everyone, the situation in Zhongguancun is very clear. The high-end market is basically dominated by Logitech and Microsoft. Logitech mice sell for 200 to 400 yuan, and keyboards for 300 to 600 yuan. Relying on quality and brand, they can capture 20% of the market. Microsoft is even more aggressive; mice with scroll wheels can sell for 400 to 500 yuan, and keyboards start at 200 to 300 yuan, capturing 15% of the market. These foreign brands are really expensive, but there are quite a few people who are willing to pay, especially those companies that pursue quality and wealthy individuals."
He paused, his tone becoming complicated: "But the one that truly dominates the market is Taiwan's A4Tech! Mice range from 80 to 150, keyboards from 60 to 120, and the prices are only a third or even half of foreign brands. The quality is relatively stable, and the distribution is extensive. We roughly estimate that it alone accounts for a quarter of the market! You can see it at almost every counter."
Li Li from the Shanghai team added, "The situation in Xujiahui is similar. A4Tech is the absolute main force. The rest are a bunch of miscellaneous brands, with mice priced between 30 and 80 yuan and keyboards between 40 and 80 yuan, accounting for about 15% of the market. These products have no quality guarantee and rely purely on low prices to attract customers with extremely limited budgets. In addition, about 30% of the market is directly eaten up by original keyboards and mice from brand-name computers like Lenovo and Founder, which are not sold separately."
Wang Haitao from Guangzhou also confirmed a similar situation.
The data is now clear:
High-end (foreign companies): Logitech (20%), Microsoft (15%), high prices, quality and brand driven.
Mid-range (Taiwanese company): A4Tech (25%), moderately priced, high cost performance, channel dominance.
Low-end (generic brands): Generic brands (15%) are cheap and of questionable quality.
OEM market: Branded machines come pre-installed (approximately 30%), which is currently untapped.
A brief silence fell over the meeting room, broken only by Ma Baoguo's clicking of his tongue. The situation was more serious than imagined. Double Swallow stood like a mountain blocking their path, firmly holding onto the largest slice of the market with its highly competitive prices and acceptable quality.
"Damn it!" Ma Baoguo slammed his fist on the table, making the teacups rattle. "A Taiwanese brand has taken up so much market share? Our own factories can't even compete with them?"
"Old Ma, don't rush." Engineer Chen from the technical department adjusted his reading glasses, pointed to the report, and said, "There's a reason why Double Swallow succeeded. Its price was just right, and its quality is far superior to generic brands, perfectly satisfying most customers who want to save money but are afraid of getting substandard products. This location was chosen cleverly."
Old Chen from the purchasing department said with a bitter face, "Even if we can produce products of the same quality, it's still uncertain whether we can keep the costs down to their level. Our raw material procurement and production efficiency will definitely not be as good as their mature system at the beginning."
Finance Director Wu was also worried: "If we price it the same as Double Swallow, our profit margin will be very small. If there's any fluctuation, we might work for nothing. If we price it higher, why should people buy our new brand?"
A sense of pessimism and doubt began to spread in the meeting room. It seemed that no matter what choice was made, the formidable obstacle of Shuangfeiyan was unavoidable.
Ling Yun listened quietly, not interrupting the discussion. Only after everyone had laid out their difficulties and concerns did he speak slowly, his voice low, yet instantly drawing everyone's attention:
"Everyone is stating the facts. A4Tech is very strong; its market position was earned through hard work." He then changed the subject, "However, it is not invincible. We are not entirely without opportunities either."
He stood up, walked to the small whiteboard hanging on the wall, and picked up a marker: "Let's analyze together what Xinghuo Electronics has."
He wrote "Our Strengths/Characteristics" on the left side of the whiteboard:
1. It has no historical baggage and its mechanisms are flexible.
Lingyun pointed this out, "Double Swallow is a large company, but a large ship is hard to turn around. We can adjust our products and respond to the market more quickly. Lao Ma, do you think we need to go through layers of approvals and wait for half a year just to change a production line?"
Ma Baoguo immediately shook his head: "As long as the technical drawings are finalized and the materials arrive, we can make the adjustments in a few days!"
2. Backed by a preliminarily integrated supply chain and labor cost advantages.
Lingyun continued writing, "Old Chen, we are a local factory, so we don't need to transport goods across the strait, and our labor costs are relatively low. This is the basis for our cost control."
Purchasing expert Chen nodded thoughtfully: "If we can achieve economies of scale, there is indeed room for costs to come down."
3. Possesses the potential for independent improvement and research and development (joint laboratory).
Ling Yun wrote this down, then looked at Li Mo and the technical department, "A4Tech is mostly about imitation and mass production, while we have already begun to lay out the next generation of technology. This is our future trump card, and also the 'momentum' we can leverage now, even if it's just a concept."
The eyes of the experienced technicians in the technical department lit up.
4. The decision-making chain is extremely short, with the boss on the front line.
Ling Yun pointed to himself. "Market feedback can be sent directly to me for immediate decisions. Can Double Swallow's marketing strategy reach the Taiwan headquarters and elicit a response that quickly?"