The next day, Kameda Masao was dumb folded when he heard from Feng Yu that they were not allowed to export their humidifier out of Japan.
Kameda Masao had targeted the China, Europe and the US market. Humidifiers were used mainly in inland cities where the air was drier. Southeast Asia was the same as Japan. There will not be many people who were willing to buy humidifiers in these areas. The market was too niched.
Kameda immediately informed his Chairman and was scolded by him. Kameda had promised his Chairman that he would help the company get the most out of this deal. Not only he did not achieve that, but they were also assigned to a small Japan market.
But even though Feng Yu’s condition were harsh, they still agreed to it. They had calculated that the humidifier’s retail price can be set above 100 USD and they would even have a 30% profit after the materials costs and authorization fees.
Japan had a population of about 120 million, and even if 0.1% of the population were wealthy families and bought their humidifiers, their profits would still amount to 3 million USD.
3 million USD was their company’s last year total profits! If they factor in the market growth for the coming year, their earnings would be higher.
But Kameda was not satisfied. For every dollar he lowered from the authorization fees, he would get a reward of 1,000 USD, and Feng Yu does not relent on the authorization fees. Thus, their negotiations went into a deadlock.
Take it or leave it. When Feng Yu’s Hong Kong Company shift their focus to the Japan market, then Feng Yu would not even authorize them! Let’s see who can afford to drag.
Just after the Labor Day’s holidays, Feng Yu applied for leave from School again. He brought Wu Zhigang to Beijing.
Feng Yu was at Beijing to purchase the advertising slots from CCTV. Last year, after CCTV got the approval to sell their advertising slots, there were more advertisements on the television. There were rumors that a 15 seconds advertisement slot during the primetime cost almost 1 million RMB!
But in Feng Yu’s heart, he thought that this was cheap. In another 5 years, from 1995 onwards, the advertisement slots for the news will be based on auctions. The first time, the rates reached more than 30 million RMB. The advertisement fees increased by over 20 times. 10 years later, this advertisement slot cost more than 200 million RMB!
No choice. CCTV had the most extensive coverage, and as long as there was an antenna anywhere in China, it can receive CCTV channels.
The more people watch the channels, the better the advertising effects. Also, CCTV had news broadcasts and weather reports. These were somethings that most people watch. Can the advertising effects be the same for other TV stations?
Feng Yu’s budget was 5 million RMB for multiple time slots. Every day there must be at least 5 slots for him to use the advertising bombardment strategy. Although it will not reach the frequency of repetitive advertising of the future years, it was because there were not much TV programs now. These 5 slots will be sufficient. Additionally, CCTV might not agree to sell him too many slots.
To contact the advertising division was not an easy task. CCTV’s advertising division was still a small department now and considered a not so important department. Despite this, it was not easy for Feng Yu to meet up with the chief.
Luckily, Zhang Ruiqiang had a friend that was working in CCTV. To show his support for Bing City’s industries, he helped Feng Yu to contact his friend. He asked Feng Yu to look for his friend at CCTV when Feng Yu arrived at Beijing. His friend could arrange a meeting for Feng Yu with someone from the advertising division.
Having lots of connections was great. Feng Yu and Wu Zhigang quickly met up with the CCTV Advertising Division section Chief Cheng Baojun.
“Hi, Section Chief.”
“Hi, Manager Feng.”
Cheng Baojun shook Feng Yu’s hand, and the surprised look was all over his face. This kid was the boss of Tai Hua Trading? Is this kid over 18 years old? He looks too young!
“I heard that your company wishes to advertise on CCTV for 1 year? Which time slots do you want?” Cheng Baojun was very direct and went straight to the point.
His position as the section chief was not easy. Many local TV stations advertising revenue was much higher than CCTV. His leaders wanted him to increase the advertising revenue, but there were not many people willing to advertise on CCTV. The only ones were all local businesses in Beijing, and the advertising fee was pathetic.
Damn. Isn’t this the same as royalty treatment? I still get to choose the time slots?
Feng Yu thought back to the previous few days when he monitored CCTV channels. He noticed that there were not many advertisements and the frequencies were even worse than Longjiang Provincial TV station. Many corporations still did not know CCTV’s potential yet. This meant that the CCTV now was still very poor!
“That’s right. We want to advertise for 1 year. If the price is right, we can purchase the advertising slots for some years.” Feng Yu had thought of an idea. He wants to take advantage of the low rates now and get the advertising slots for the next few years. With the advertisements on CCTV channels, He might get to earn more from his Wind and Rain fans.
“Few years?” Cheng Baojun was surprised. If it weren’t for Division Chief Shu’s recommendation, he would have thought that Feng Yu was joking with him. Who in the right mind would spend so much on advertising?
“That’s right. What’re the rates now and what are the available time slots?” Feng Yu replied smilingly.
“We still have slots any time of the day. Which time slots do you want? But we can’t sell you the slots for the next few years. We can only sell you the slots annually.” Cheng Baojun shook his head. He also wanted to sell more slots, but his leaders would not approve.
Feng Yu felt some regrets and said: “How about this, we can sign a letter of intent. If next year, there are no other competitors for the same time slots, CCTV will still sell me those slots. If there are competitors, then we will bid for that slots. This way, will it still violate your regulations?”
“This…… seems like it is not against the rules.” Cheng Baojun had some hesitations. This was not against the rules, but no one had ever done this before.
“Since it is not against the rules, we have reached a consensus on this part. Let’s talk about the timings. Do you still have the advertisement slots before and after these programs: , and ?” Feng Yu hurriedly change the topic.
“The slots before and after were sold. The one slot after the and each was also sold.” Cheng Baojun said.
was a program host by China’s top broadcaster and host, Shen Li. It was the first fix program and current this program had the highest ratings. But Feng Yu remembered that the coming year, this program remained the same and did not change with the times, resulting in their rating drop. This program was later replaced by .
Other advertisers prefer the time slots for ? That’s fine. Feng Yu prefers and !
“I want the last slot before the and a 15 seconds advertising slot after that. It will be the same for the . I also want a slot before and after 12 noon, a slot in the evening at about 8.30 pm. All the slots are for 1 year. Chief Cheng, please calculate the total amount.”
Cheng Baojun was shocked by Feng Yu. Was this company so rich? 5 advertising slots a day? Was there a need to advertise so many times in a day? It would cost at least over a million RMB for a year!
But anyway, he would be able to achieve his targeted advertising revenue this year!
