One day later, all the distributors noticed that there was an increase in the orders from the Post Offices. They were confused by the sudden increase. They had spoken to the shopping malls; telecommunication equipment retailers and these places were willing to help them promote Aiwa Pagers. But Post Offices were special units, and it was not easy for the distributors to get their support. But why did the post offices’ orders increase so suddenly?
The distributors received a notification from Tai Hua Trading informing them that they had signed a contract with the higher-ups and the Post Offices will promote Aiwa Pagers. Tai Hua Trading had paid a heavy price for this contract.
The cost of this contract was almost more than 10 million RMB a year. This was more than the advertising fees on CCTV. This was considered a heavy price to pay. But as the sales increases, the profits also increased. 10 million RMB was nothing compared to the profits.
The Post Offices was China’s most extensive network covering all of China. After receiving the orders from their higher-ups, all the post offices start to push Aiwa Pagers. Not only the counter staffs at the post offices were recommending Aiwa Pagers. Posters were also placed outside the post offices.
Before this, the post offices were recommending pagers to their customers based on the prices. The higher the selling prices of the pagers, the higher their profits were. These profits were the post offices’ profits and had nothing to do with the Telecommunications Ministry. Aiwa Pagers will be giving a share of their profits to the Telecommunications Ministry.
The Telecommunications Ministry’s memo to all the post offices had stated clearly that Aiwa Pagers were developed and manufactured in China. These pagers were China’s pride, and they should give their full support.
This was instructions from the Ministry, and how could all those post offices defy this instruction? The Post Offices were China’s biggest retailer of Pagers.
As such, all the post offices followed the instructions from the higher-ups and proactively promote Aiwa Pagers. After all, this pager’s commercials were aired on CCTV, and lots of consumers knew about this.
As consumers had heard of Aiwa brand, it was easy for the post offices to promote these pagers.
From that very day, all the counter staffs at the post offices recommended Aiwa Pagers to every customer that walked in.
Because of this, Aiwa Pagers sales shot up suddenly.
Panasonic and NEC were still struggling to survive in China’s Pager market. Even without the alphanumeric Chinese Pagers, they still have numeric pagers. Although the profits for numeric pagers were lower, it was better than none. However, their numeric pagers were also not selling well and soon, they found it hard to survive.
It seems that their sales had dropped overnight. No one was buying their pagers regardless whether it was alphanumeric or numeric pagers.
From their market analysis, the number of pager users was increasing, but why was their pager sales dropping?
Both Panasonic and NEC start to investigate this and found that it was Aiwa Pagers that was taking their market share! A Chinese character pager company had beat them with one pager model!
Now, Panasonic and NEC had two choices. One was to continue to struggle even when they were making losses and think of a way to increase their sales. The other was to withdraw from the Chinese market to stop their losses.
Both companies had chosen two different strategies. NEC decided to leave the Chinese Market, and Panasonic decided to remain as they still have other products like TV and Video Cassette players, and they could still make use of their branding to sell their pagers. Panasonic was worried that if they leave the Pager market, their other products will be affected too and had to withdraw from China.
NEC’s decision to leave the Chinese market had attracted the attention of Motorola. Motorola had also discovered that the number of pager users had increased faster than last month, but their sales did not increase. Their Chinese Characters pagers’ sales had even declined. This was way out of the norm.
There was one less competitor, and with Motorola’s reputation, branding and market share, most of the new pager users should be choosing their products. Why were their sales not increasing?
Panasonic also did not introduce any new products, and they did not even have any marketing campaign. Who was taking away all the market share?
In the end, Motorola singled out the new pager brand, Aiwa Pagers, that was taking away all the market share. A company that manufactures Chinese Characters pager. The retail prices were cheaper than their cheapest Chinese Character pager by a few hundred RMB!
A few hundred RMB was a lot for the Chinese in this era. This was mainly when Motorola pagers had similar features as Aiwa Pagers, and there was not much difference to the consumers. The consumers had no reason to purchase the more expensive pagers.
If Motorola was not the first pager brand that entered the Chinese market and had build up their branding, their sales would be affected further. But Motorola knew that Aiwa Pagers does not have high production and they were not worried that Aiwa Pagers will affect their market share.
Feng Yu was listening to Wu Zhigang’s report. All the distributors were increasing their orders, and Feng Yu nodded satisfied. With the post offices sales channel, the result was different. In about a week, the results were shown, and in a month, Aiwa Pagers should be the number two brand in China’s pager market. Feng Yu’s target was to be China’s number one pager by the end of next year. He wants to beat Motorola!
Feng Yu was not building castles in the air. In his previous life, many Chinese pager brands will be appearing early next year. Although these brands were not selling well, they also occupied half of the market shares.
In his previous life, those unknown Chinese pager companies had snatched half of the market share from Motorola, and in this lifetime, Feng Yu had the support of the government and had sufficient funds, better marketing campaigns, and better products. There was no reason why he could not beat Motorola!
Motorola’s primary focus at this time had shifted from pagers to handphones. The leader in the handphone market was still Ericsson. But in a few years, Motorola will take over their position and become the leader in the handphone industry.
It was inevitable for Motorola to lose its pager market share as they shift their focus away from pagers. But Motorola was still receiving high profits from their pagers as their retail prices were the highest in the market!
Feng Yu wanted to increase Aiwa’s position in the Chinese telecommunication market before Motorola could react. Next year, Aiwa will face Motorola head-on in a showdown!
As for this year, Aiwa Pagers’ production was limited. Even if there were high demands, there could only be so many sales. But this was also a good thing, as it can avoid Motorola’s attention.
It might be very dangerous if Motorola starts to target Aiwa Pagers now. After all, Motorola was a world-renowned telecommunications giant, and if Motorola were to take precautions now, Feng Yu does not know if all his plans will succeed.
Although Feng Yu was confident that his sales will not fall, those other smaller brands will not be able to survive then. It will be a duopoly.
Without those smaller brands entering the market, Feng Yu was not sure if he could still beat Motorola and drag Motorola down from its throne!
Translator’s notes: My first handphone was Ericsson 388! Lol. All of you can guess my age now. What’s the model and brand of your first handphone?
https://en.wikipedia.org/wiki/Ericsson
