CHAPTER 7 AGE OF MARKET

Overview:
 MOU between Lian Xiang company & Du ting

 Achievements

 Promotion Strategies

 Media Advertisement
MOU - LIAN XIANG COMPANY & DU TING

 Du Ting – Distribution Agency, Chengdu

 Operates by fostering relationship with Customers /
Agents
 Operates with three employees

 Signed MOU to look after the sales in the South west

region of China.
 Appointed 10 Agencies
ACHIEVEMENTS
 Increase in Sales by 150 %
 From 600 Machines to 60,000 Machines a Year with
18% of GP.
 Every quarter the sales account is taken reward of RMB
1,500,000 is given for the sales above RMB 8,000,000
by the agencies – BTL activity
PROMOTION STRATEGIES
ATL:
 All forms of media Oriented Promotions focusing on
mass people.
 E.g. Television, Radio advertisements

BTL:
 Cost effective promotion focusing on specific target
group.
 Offering sales commission, Van advertisements
MEDIA ADVERTISEMENT
 E.g. Advertisement quote: One Family, “one 1+1” dad
figures out Problems, One family “one 1+1” MOM helps
to manage households, “one 1+1” helps me study
“Lianxiang personal computers”
CHAPTER-8 FROM PIG RAISING FOR EVERYONE
TO COMPUTERS FOR EVERYONE
Overview:
 Objective

 Goals achieved

 Drawbacks

 Hong Kong Situation & Solution

 NPD
OBJECTIVE
 To be the chinese market leader surpassing bench
marked competitors
Steps taken to achieve the target:
 Three year plan wherein

 To increase the production capacity of the plant.

 Reducing the Cost of Production.

 Purchase of raw materials at lower cost by bulk buying.

GOALS ACHIEVED
Result:
 The production increased from 300 to 1000 Computers a Day.

 The company got Intel Processors at cheaper price.

 220% increase of Sales.

 Achieved net profit of RMB(Chinese Yuan) 5 millions.

 Competed with the Compaq, IBM, HP.

 Emerged as Market leader next to IBM.

DRAWBACKS
 There has been mindset between the customers those
goods produced Chinese companies is of inferior Quality
Solution:
 Overcome with ISO 9001 Certification
HONG KONG SITUATION & RESOLUTION
Hong Kong – Depressed situation
 Miss management by the managers. (Leu tanping)

 Banks refused loans to the Company

 Price of Shares went low from RMB 2 to RMB 0.25.

Liu Chanzhi’ s Resolution:-

 Arranged a loan of RMB 5 million from well wishers

 Salaries of managers were reduced by 25 %.

 Removed R &D Department from Hong Kong to

Shenzhen
NEW PRODUCT DEVELOPMENT
 Lin Jun’ s Statement -
“In the early days we did what I call Backwards
Engineering: First we designed something and sold it to
the customer. Then we started to do what I call Forward
Engineering: We found what the customer needed and
then we designed to those specifications”.
Scorpio- A Strategic Approach

 The Company setup a Computer Development Department

with Lin jun as manager.
 Lin jun Designed a new Computer and gave a trendy exterior
look and named as Scorpio.
 The new personal Computer made a remarkable sale in the
market.