Extraordinary Genius - Chapter 307 – Aiwa’s positioning
“Guangzheng, I heard that Wind and Rain Consultancy had moved most of its funds to the US. What do you think Feng Yu is going to do? He wants to enter the US market?” Fu Rongjing frowned and asked.
“Dad, what’s there to worry about? Even if Feng Yu had moved all his money out of Hong Kong, he would never give up his businesses in China. Don’t forget he is Chinese. The financial market in China is not as developed as Hong Kong. If Feng Yu wants to enter the financial industry, he will still come to Hong Kong. Uncle also told me that the lawyer, Mr. Wilson had left for the US a few days ago.”
“Wilson? That means Feng Yu is investing in something in the US?”
Even lawyer had traveled over to the US. That means it was for the contract signing. What investment was that for Wind and Rain Consultancy to use most of their funds? That was a few hundred million USD.
“Dad, stop monitoring Wind and Rain Consultancy. Since Feng Yu did not mention anything about it, that means he does not want us to tag along in this investment. What we should do now is to manage Aiwa company’s sales.” Fu Guangzheng was not curious about what the investment was since Feng Yu did not tell him. Now, he understands one thing. If he treats Feng Yu sincerely, Feng Yu will do the same to him!
“Hmmm, I will help you with Hong Kong, Macau and Taiwan. You will focus on the China market.” Fu Rongjing nodded, Hong Kong’s Aiwa company’s market was the whole of Asia.
The Fu family had well-established sales channels. But in China, their sales distribution channels were not set up yet. Actually, Fu Rongjing wanted to a Chinese distribution company to act as their agent, but Fu Guangzheng refused.
Fu Guangzheng knew that Feng Yu had already established a good network of distributors for home appliances. Walkman and radios should not be a problem for him.
Furthermore, Hong kong’s Aiwa company was the primary distributor appointed by AIWA Japan, and Feng Yu was the controlling shareholder for AIWA Japan. Why would Feng Yu reject Fu Guangzheng to be the distributor in China?
If it was not for AIWA setting up Hong Kong Aiwa company before Feng Yu bought AIWA shares, Fu Guangzheng felt that Feng Yu would personally be the distributor for AIWA products.
Fu Guangzheng had done the market research in China and there were already Walkman in China now. But the best selling brand was Sony. He had bought the Sony Walkman and made a comparison with AIWA Walkman. AIWA Walkman was better in design, sound quality and prices.
Especially the sound quality. This was the most important. He believes that the sales of AIWA products in China will not be too bad.
“You want our Tai Hua Trading home appliances dealers’ contacts? No problem. I will let Wu Zhigang pass it to you. Do you know how to negotiate with those dealers?” Feng Yu asked.
Fu Guangzheng was thinking in his heart. Although you, Feng Yu had developed very fast in the recent years, our Fu family had negotiated with thousands of dealers before. I still do not know how to negotiate with them?
But since Feng Yu asked him about this, he must have some other meanings. Could it be that this negotiation will be difficult?
“How should I negotiate with them?” Fu Guangzheng asked curiously.
“The dealers I am dealing with are all the top dealers in their respective provinces. They have their ways of doing things and have strong financial backings. If you are negotiating with them, what will you be offering them?”
“I will give them a profit of 10 RMB for every Walkman. This should be enough to attract them, right?”
Now, the Walkman prices were over 100 RMB, and for a place where the average annual income was only about 1,500 RMB, it was a big-ticket item. It can even be considered a luxury product.
10 RMB profit was considered very high, and Fu Guangzheng felt that the dealers should be able to accept it. If one dealer sells about 10,000 Walkman a year, that would be profits of over a hundred thousand RMB.
“I am not saying that you are offering too low. I think your offer is too high.”
“Too high?” Fu Guangzheng was confused. 10 RMB profit was too high?
“I think 5 RMB for every Walkman should be enough. You can create a reward system and those that sold a certain number of Walkman, you will give them some bonus. This way, some dealers will be getting less than 10 RMB per Walkman, and some will be getting more. But those that will be getting more than 10 RMB profits will be generating more sales than what you expected!”
Fu Guangzheng nodded. His family had also used this reward system before, and he understood immediately. But should he set the minimum number of Walkman lower? Will the dealers agree to 10,000 units?
“I understand and also knows how to set up this reward system. But what about the minimum number of units? I wanted to set the minimum number of units at 10,000 units per year. If I am to introduce the reward system, should I set it lower?”
Feng Yu was laughing in his heart. Fu Guangzheng really does not understand the Chinese market. From the sales of the bladeless fans, Feng Yu knew that there were more wealthy Chinese now and they were more willing to spend.
In his previous life, without factoring in the other brands, Sony Walkman alone had sold a few million Walkman a year. The total number of Walkman sold in China was more than 10 million units.
Although it was still slightly early, Sony’s sales in China was less than 200,000 units. That was because the sound quality of the Sony Walkman was terrible. It was not as good as those big radios. Also, Sony did not use the right marketing strategies.
The target audience for Walkman was the young adults and teenagers. In Feng Yu’s past life, there were some high school students used the excuse of learning English to get their parents to buy a Walkman for them!
Sony’s marketing strategies were emphasizing music and sound quality. The parents in China think that listening to music was a waste of time! Learning English are good kids.
Feng Yu had even thought about the commercial. A high school student using the Walkman to learn English, Russian and other educational knowledge. Those parents will never stop their kids from getting a Walkman. They would even buy the Walkman for their children.
Feng Yu does not care if their child really uses the Walkman to learn foreign languages or listened to English songs. This way, the annual sales of Walkman will definitely ‘s exceed Fu Guangzheng’s expectations. Feng Yu even felt that this remaining 6 months of the year, the sales could hit more than 500,000 units!
“The minimum number of units is too low. It should be at least 12,000 units. I am talking about the average per province. There are some provinces, like Beijing, Shanghai that should be set higher and some provinces without minimum units. Places like Tibet have low population and the development at these regions were slower. But there should be at least over 20 provinces that can sell more than 12,000 units. I am not talking about annual. I am talking about from now until the end of the year.”
“What? From now until the end of the year? There is only 6 months left. You think the average sales for each province will exceed 12,000 units? That means every month there would be more than 2,000 units sold. Is it even possible? I had done a market research. Sony only sold less than 150,000 units last year. This year, they might reach 200,000 units. We have only 6 months left and you think we can perform better than Sony?”
Feng Yu smile and said: “Leave the commercial to me. There were many reasons why Sony was not doing well. The most important reason was that Sony is a Japanese Company. But AIWA is a Chinese company!”
In his past life, AIWA was able to overtake Sony in China was because of 爱华 (AIWA’s Chinese characters. Ai = Love, and wa = Chinese or China). The consumers in China misunderstood that AIWA was a Chinese company and now, the consumer does not need to misinterpret this company. Because AIWA was controlled by a Chinese!
It was better for a Chinese to control the Chinese market!