“It’s my turn… It’s my turn. Give me the white color model, and four batteries with my change of 1 USD.” A blonde young man waved two 100 USD bills and shouted.
“Sir, these are the items you wanted, and here’s the receipt. We provide three months warranty as long as the damage is not caused by an external force. You can do a full refund within one week and get a brand-new replacement within one month if it is faulty.” The store assistant passed a box to that young man and repeated the same line emotionlessly.
The people at the back of the line shouted. “Leave after you are done. We are still waiting!”
Feng Yu is pleased to see the long line outside one of Aiwa’s sales points. Everyone knows about the MP3 player now and knows how useful this little device is.
Many people felt an MP3 player will change the world and replace all other portable music players. This will be the mainstream music player in the future.
Also, it had become a trend to use an MP3 player. Why are you still using a Walkman, CD player, MD, etc.? It is already outdated!
Don’t think the kids from western countries will not compare among themselves. In fact, the comparison among them is more severe than the kids in China, and they are more brand conscious.
Aiwa is one of the leaders in the portable music player industry, and its brand is well-known.
Furthermore, Aiwa had used the most advanced technologies, and the music quality, designs, etc. are unique!
On the day the third-generation MP3 player goes on sale, long queues formed up outside the retail stores. Luckily, Heitaro Nakajima had ordered his factories to increase production, and they did not run out of stocks on the first day.
“Boss, not only our retail stores have long queues, our distributors are calling us to make additional orders. We are making more than 50 USD in profits at the retail price of 199 USD. We estimate the sales of this MP3 player will hit more than 1 million units!”
Only one million units? Feng Yu is not satisfied with this figure. Popular models of Walkman and CD player can easily reach 1 million units of sales. This is an MP3 player, and it is more high-tech. How can it be only 1 million units?
Feng Yu tapped on his temple as he tried to recall how those businessmen sell their products and sales tactics in his previous life.
Feng Yu suddenly slapped his forehead. He got an idea. Hunger marketing!
“Heitaro Nakajima, have you consider taking in pre-orders?” Feng Yu asked.
“Pre-orders? Why should we let the customers pre-order when we have ready stocks?” Heitaro Nakajima asked.
“No. Our product is too popular, and we had run out of stocks!” Feng Yu firmly replied.
“No. I had increased the production lines of our factories since our first-generation of the MP3 player. We had also reduced the production lines for Walkman, CD players, etc. and converted them to MP3 player production lines. Our monthly production is over 150,000 units. Moreover, we had started production for more than one month before.” Heitaro Nakajima replied.
Heitaro Nakajima does not want to let Feng Yu has the impression that he is incapable. He might be old now, and maybe Feng Yu will pick his successor in another two years. But he still wants to prove to Feng Yu that he is a qualified leader and hope to work longer in Aiwa.
“Heitaro Nakajima, you did not get what I said. I am asking you to announce that we are running low on stocks. If the consumers have the impression that if they don’t buy our MP3 player now, they will not get it anytime soon. What do you think will happen?” Feng Yu hinted.
“There will be two possibilities. First, some consumers will pick the cheaper and inferior products from other brands. After all, there are more than 10 brands of MP3 players in the market now. Although those MP3 players cannot be compared to us, it’s like our Walkman. We are selling at 22 USD, and other brands are selling at 6 USD. People will still pick the cheaper option.”
“The second possibility is more people will be queuing up outside our stores to grab our products. Our sales will skyrocket in a short period, and our products might really be out of stock!”
“That’s right. You had analyzed the consumer behavior very accurately. Other companies’ MP3 players might be cheaper than ours, but they cost at least 150 USD. Those MP3 players might not have as many functions, but their technologies are not as good as us, and their production cost will not be lower than us. That’s why these companies do not have a pricing advantage, and consumers who are willing to spend 150 USD on an MP3 player, will not mind spending 200 USD for a better one. They will never get an inferior product just to save 50 USD!”
“Secondly, more people will buy our products after we announced we are running low on our stocks. So what if we are really out of stocks? All our stocks are sold, and those consumers who did not manage to get one can pre-order. We can give a discount of 10 USD for pre-orders. This way, we can use their deposits to convert our Walkman and other portable music players’ production lines. I had mentioned before that only a few years is left for the portable music player market, and the CD player market will shrink drastically. That’s why we must stop the production of CD players immediately.”
Heitaro Nakajima is impressed. Use the customers’ deposits to produce our products is something he had never thought about.
Cash is critical to every company, especially the companies in the manufacturing industry. If a company’s cash flow is disrupted, the company might be bankrupted anytime.
Although Aiwa has enough funds, after giving out dividends, increased development funds, and converting the production lines, the company’s fund is running low.
Aiwa had also increased their spending on advertising, and they still have ongoing lawsuits. The amount spent on lawyers is significant.
If Aiwa can use other people’s money to purchase raw materials and manufacture products, it can relieve the pressure on their finances. More importantly, this will stimulate the product’s sales.
The MP3 player is the trend now. All youngsters with money will want to own one, and there are millions of wealthy young people out there.
If one of their friends own one MP3 player and they don’t have, they will be envious of others.
At this time, even if there are no stocks, they will also try to pre-order one. They will not mind waiting two weeks, or even up to one month for the MP3 players.
This is a real portable music player that can fit into pockets. It is more convenient and portable than other products, and consumers can even use it when they are engaging in outdoor sports.
“Boss, you are too creative. Although it will lower our profits, it will also lower our risks and pressure on our cash flow. Our sales will also increase. I am confident this model of MP3 player will reach 2 million units!”
Feng Yu patted Heitaro Nakajima’s shoulder. “That’s right. This should be the attitude! We will bring the best music quality to our users and crush all our competitors!”
“Boss, don’t worry. I promise no other companies can compete with us with their MP3 players!”
