Lu Feng saw that Sean hadn't spoken yet, but his two subordinates spoke first, wondering if he had invited back a patriarch.
“This is an office, so of course we should meet here, Mr. Sean. You’re here to work, not to enjoy yourself, right?” Lu Feng said somewhat gloomily.
Before Li Xiaosi could finish translating, another blond man next to her looked at Lu Feng with disdain. He thought the Asian man in front of him looked to be about his own age, probably rich but not very knowledgeable. He said, "Who is Mr. Sean? He's a business mentor all over Europe. Do you even know what respect is?"
The atmosphere was somewhat tense. The people accompanying Lu Feng were all middle-level managers in the company and had never encountered this situation before, so they didn't know what to do for a moment.
Lu Feng said to Li Xiaosi, "Ask him if he can do this job. If he can't, then forget it!"
After Li Xiaosi finished speaking, Sean seemed to wake up from a dream, looked at Lu Feng and smiled, saying, "I'm sorry, the language barrier is indeed quite inconvenient. My two assistants may have said something inappropriate just now. They're young, so I hope they won't mind too much. However, I hope Mr. Lu can find a better place in the future."
“A better location is no problem, of course. The question is whether it’s worth it. Let’s have a meeting first. I just got off the plane today and I’m very tired. Let me explain the market situation here and your plan.” Lu Feng pulled out a chair and sat down.
Sean waved to the blond-haired man next to him, who took out a folder and stared at Lu Feng, saying, "This is our UK home appliance market research report and the market plan we made in conjunction with Jiafeng Electronics."
"Go on!"
"Currently, the main home appliance brands in the UK market are Siemens, Beko, and Hale. Siemens has a market share of 45%, making it the absolute market leader. In terms of brand recognition, market share, product quality, and sales channels, giants like Siemens are unshakeable by Jiafeng Electronics."
"Only Beko and Hale remain. Beko's product quality is relatively inferior to Siemens' in terms of technology. Their main sales are not hardware, but television content providers. They currently have two wireless media companies that provide paid content services."
"Haile Electronics' main business is the production of low-end components, auto parts, and construction. The home appliances it mainly sells are low-end products with low profit margins. Last year's financial report showed that Haile's home appliances had a net profit margin of only nine percent, far below the industry average. If Jiafeng Electronics wants to compete with Haile on price, we believe it has no chance at all. High tariffs will become a barrier, and the added costs of sales channels will make it impossible to compete."
"These three companies account for 87 percent of the UK market share, while the remaining 13 percent is dominated by foreign capital."
Since the birth of the European Union, tariff barriers within European countries have disappeared, facilitating the flow of products between countries. Conversely, tariffs have been raised on companies in Japan and the United States, leading to a continuous decline in their market share in the past two years. This was the original intention behind the establishment of the European Union.
Each of the three companies has its own strengths: one has strong product capabilities, another has exclusive content, and the third uses low prices to seize the market, leaving no room for others to survive.
Even if local businesses and policies don't deliberately suppress Jiafeng Electronics, it's a pipe dream for them to survive. No matter how low the price is, the price will immediately go up after adding tariffs.
After gaining a basic understanding of the market, Sean reviewed a lot of information about Jiafeng Electronics. When he first saw the document, he even told his subordinates, "Just write that Europe doesn't welcome you, and that's it."
But he couldn't do that. He still needed to make money, and he had to find a way to drag it out as long as possible. In the end, he would only end up with nothing, as long as he made money.
"In response to the different strategies of these three companies, we have put forward two plans for Jiafeng Electronics. Low price is definitely not a viable option, and wireless media licenses are not easy to obtain. Content providers have a monopoly on content, so we can only benchmark against Siemens, mainly targeting the price gap between Siemens and Beko, which is where both sides are relatively weak."
"For example, Siemens' TV sets have a total price of £876, Beko's TV sets have a total price of £627, and Hale's are less than £400."
"Based on the data you provided, the cost price of Jiafeng Electronics' three TV sets after customs clearance is £304, which is lower than any other company's price. However, this price includes dealers, sales channel commissions, advertising expenses, etc. We estimated the price to be £620, which just overlaps with Beko's product price."
"However, Jiafeng Electronics' three products are better than Beko's in terms of quality and size, so we believe that setting the combined retail price of the three products at £736 is a strategy to target the price gap between the two companies."
Lu Feng listened intently. Their market report was excellent. He had to admit that no money was wasted; this was the business tycoon's control over the overall market.
“I have a question. You just said that our total landed price is 304 pounds, but the final estimated market terminal cost is over 600 pounds?” Lu Feng frowned and said, “That’s double the price.”
“That’s right. Our estimate is based on the comprehensive cost method. The hard costs include distributors, whose profit margin is 20%. Next is the sales channel. The largest electronics retailers in the UK are Fincaney and Carrefour, whose minimum profit margin is 30%. Then there are inventory storage, turnover cycle, transportation, and employee costs, which add up to about 25%. The remaining 25% is for advertising, celebrity endorsements, appropriate price reductions and promotions, and losses, etc.” Sean answered, staring at Lu Feng.
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