I was discussing a packaging project with my engineer and with all the projects going through it is really interesting to see the marketing approach of various customers.
I remember marketing folks at Philips mentioning that their first shaver was introduced in the US at too low a price and didn’t sell well. After increasing the price to $89 sales took off but this was back in the 60’s. In today’s dollars that would be $650.
The high end model shavers are selling for 4,000 Yuan in China, which is $615! My packaging engineer told me these shavers are very popular gift items, similar to Iphones, Ipods and other luxury items such as Gucci sunglasses etc. Doing a little math and info from a recent factory visit these shavers are representing US$200M in annual sales: a ‘small slice’ of the overall shaver market in China according to the GM doing the presentation.
Before Iphone got introduced on the Chinese market 2 million were already in use. A business week article was discussing how Iphone would fair in China after the failure to market in India, and just before that people were limited to buying 2 Iphones with cash in Apple stores going to…? You see similar trading going on into China with Amazon’s Kindles, not for sale over here.
The feedback on the Iphone India experience was very feature and cost oriented but you don’t see these discussions in China: if the product is high quality, looks cool, works well, foreign well known brand the price doesn’t seem to matter that much because it’s a status symbol (same as everywhere else I guess).
Giving gifts is a whole different story, making me realize how important giving good high end gifts can be, not only in China, also in other countries such as Thailand. Don’t bother showing up with something cute, symbolic, well meant with a good heart, the resulting disappointment and embarrassment is only limited by the fact that as a foreigner you don’t know any better!