Chapter 127 – Foreign businessman came knocking on the door
It was 1st May, Labor Day but Tai Hua Trading staffs were working overtime.
“Hello? You want to order 100 units of Prestige model? No problem, but our company’s policy was that you must order at least half of that quantity, of Noble model too. What? You don’t agree? Then sorry, we do not have the Prestige model!”
After a month of preparations, Bing City was the first to launch the Ultrasonic Humidifier. Even though winter had passed, and the rivers were no longer frozen, but there was no rain, and the air remained dry.
Coupled with effects from the TV advertisements, everyone was looking forward to getting this humidifier. On the first day of launch, there was a buying frenzy. This was also because Feng Yu had used hunger marketing strategy. He told the departmental stores and cooperatives that there were limited stocks. This was even announced in the advertisements.
After Bing City’s residents got wind of this news, all the humidifiers at the departmental stores and cooperatives were sold out before noon. The residents had the mindset of getting one before it was sold out.
Actually, there were still tens of thousands of humidifiers sitting in the Motor Factory’s warehouse, but Feng Yu just did not want to release them. The advertisements had highlighted the new features and made comparisons between the new humidifier against the older version. Those leaders and bosses also took note of this new product. Since there was a newer version, why not get it since they were had spare cash.
Feng Yu also sent some 2nd generation humidifiers samples to the government agencies that were close to him. The leaders then distribute the older humidifiers samples to their subordinates.
The price of this new humidifier was twice of the older ones. It was the same for both wholesale and retail prices. Feng Yu said that those that were willing to spend 200 RMB for a humidifier would also not mind paying 300 RMB for one. Those that were not willing to spend 200 RMB for a humidifier would also not waste 150 RMB for one.
So, Feng Yu set high selling prices for the new humidifiers. True enough, the high prices did not affect the sales and increased their profits.
The cost of the ultrasonic humidifiers was higher than the older version but not to the extent of 2 times.
Furthermore, the words “Patented product, counterfeits will be prosecuted” was printed on the boxes. In the instruction manual, there was also a section on the punishments of violating the patent law and warned those big factories with R&D departments to not use their technology.
This time, it was stated clearly that the humidifier was manufactured by the Motor Factory. This would make those factories think twice before producing counterfeits. If they get involved with a large state-owned enterprise, their local government might not be able to offer them protection.
After the new version was launched, Wu Zhigang contacted the dealers to inform them and asked them to come over to discuss the contract.
These dealers had made some profits from the last batch of humidifiers, but it was not as much as the electric fans previously. Also, the humidifiers were easily imitated. A few dealers expressed that they were not coming over.
Wu Zhigang followed what Feng Yu did previously and blacklisted those dealers. Tai Hua Trading would never work with those people or their companies again. Feng Yu had said before: There can only be people begging him to sell his products and not the other way around!
Tai Hua Trading can afford to be so arrogant as they had the patent and had monopolized the market.
Feng Yu promised those dealers that stick with him will earn lots of money. But if there were those that want to sell counterfeits and grab the market share, then that will depend if they had the ability!
Feng Yu planned to buy advertising slots at CCTV a few days later. CCTV at that time was not as powerful as the later years. Last year, CCTV was given the approval to air commercials, and the advertising fees had risen since then. But other than the prime time in the evenings and the timings, before and after, the news, all other advertising fees were still not high. There were still many empty advertising slots.
Feng Yu believed that CCTV would give him the good slots, higher frequencies, and extended advertisement length if he buys the advertising space for 1 year.
Feng Yu does not care whether if others believe in the advertising effect of CCTV. He had absolute trust in this TV station!
Fu Guangzheng also brought good news to Feng Yu regarding the patent applications. The patent for Asia was approved, and the application for Europe and the US was still ongoing. As for Africa, forget it. Even you had the license from the United Nations, there was still nothing you could do in that area. Furthermore, Feng Yu also did not expect his humidifiers to be selling well in Africa.
This news also meant that the Hong Kong office would start operations soon. The first target was Taiwan. The humidity in Hong Kong was quite high, and unless the air purifying feature for the humidifier were introduced, there would not be many sales in Hong Kong.
The sales for Hong Kong was handled by Fu Guangzheng. With the Fu family around, Feng Yu had nothing to worry about the sales. Regarding sales and marketing, Feng Yu still could not be compared to the Fu family.
Even the retail prices were higher than what Feng Yu set. He found out that the Fu family had set the prices based on the region’s development. For instance, the retail price for the humidifier in China was 300 RMB. For Taiwan, it was 500 RMB, and for some countries in Europe, it was more than 150 USD. The retail price for the US and Canada even reached 200 USD.
Fu Guangzheng explained to Feng Yu the reason for these prices. The US population was distributed over a large area, and their target market segment was the middle class and above. This segment could easily afford this price.
Also, the packaging of the humidifiers for the US market did not print “Made in China,” but instead it printed their Hong Kong Company. This way, the consumers would not look down on the product.
When Feng Yu heard this, he was slightly unhappy. What does it mean by consumers will look down on China products? In future, China will be the World’s factory. Almost everything that was used in the US or Europe will be made in China! See if these countries dare to not use products made by China?
Feng Yu got pissed and requested the US retail prices to increase further by 5 to 10%. He even jokingly told Fu Guangzheng that he did not understand the Americans. Americans do not buy the best products, but they buy the most expensive products!
Fu Guangzheng was dazed when he heard what Feng Yu said. He went back and discussed with his family and even his family agreed with what Feng Yu said. The transportation cost to the US was not low and what Feng Yu said also made sense. The retail price should increase slightly for the US market.
Feng Yu did not expect that the Fu family took his joke seriously and accepted what he said. But this was not bad either. His profits will also increase. Finally, he could make money from the US, and he was very excited over this.
Just when everything was going smoothly, Feng Yu received a call from Wu Zhigang asking him to return to office as there was a foreign businessman at their office, wanting to order the ultrasonic humidifiers!