Why did Glenn's old job in the microwave oven hit a losing battle?

In the previous article, a shark analysis of the first quarter of the development trend of home appliances market, home appliances overall market although weak, but in every micro-category but flames of flames. In what seems to be the most obscure market for the microwave oven, the Battle of the 10-year-old and the United States is changing, and all this reflects the future development path of Chinese brands.

Two recent events have caused a shark's attention.

First, April 14, the Grand (Zhongshan) Electric Co., Ltd. about 2000 workers started from 0 o'clock in the morning, the dormitory, canteen, workshop assembly line, supermarkets, doors, electric forklifts, police cars and office computer equipment, and so smashed. According to the workers, "the main cause of the incident is that the salary is very low, only to the original commitment to the Two-thirds, when the recruitment said 3000-4500 yuan, every week have a rest, bag eat bag, but come in at all is not the case." ”

Second, from the home appliance market monitoring institutions in the data, March 2014, the United States, the microwave market retail volume, sales, respectively, to 6%, beyond the LAN Shi became China's microwave oven retail market first.

As a microwave oven started in 1993, Glenn was not at all optimistic, and in the hundreds of newspapers and magazines in the country, it opened up a "microwave food" column to promote microwaves in the Chinese. Kung Fu does not bear the heart, the grant has created a microwave oven category, more than 10 consecutive years ranked first in the market, in 1999 years or even 70% of the market share, the grant has become synonymous with microwave ovens.

Although later on from the microwave oven to the air-conditioning, washing machines and other products, but the microwave oven as its old line has been the most important. Why would Glen be a defeat in the old bank? One shark thinks the reason is three.

First of all, the "price war" strategy of the grand is to make itself stand out, but also greatly damage itself and the whole market.

The magic of the monopoly of the microwave oven market is "price war", August 1996, the first price of the microwave oven, the average drop of 40%, when a Panasonic microwave in China market price of more than 3000 yuan, and the price of the microwave oven is controlled by about 1600 yuan, only the former 1/2. Over the next 7 years, the grand total has carried out 9 large-scale price reduction, each price reduction generally in 30%-40%.

The price war lethality astonishing, all of a sudden the domestic market number of microwave ovens from 100 dozen to less than 30, but also to the market share of the first. However, the murder of 1000, since the loss of 800, the mad price of the grant of the war also makes its profits significantly lower. In order to keep prices low, the company has to reduce operating costs, factory workers are not related to unrest. At the same time, a sharp drop in the price of microwave ovens, while conducive to consumers, the popularity of microwave ovens, but the overall market for the microwave oven is a nightmare.

Second, the "low cost" model chosen by Glenn has made it unable to invest in technological innovation, and is thus technically high on the success of the sneak attack of the big beauty.

The greater focus on the price war is on the traditional Chinese manufacturing mentality of low-cost manufacturing and low price sales. As a result, the official into a vicious circle, in order to maintain low-cost, can not carry out a larger investment to technical innovation, product no breakthrough, so have to reduce prices, price will affect the investment in research and development.

In fact, Grant is also promoting their own technology research and development, but most of its technology research and development stay in the appearance of the product shape, color and other aspects of micro-innovation, the actual innovation is relatively few. For example, in 1999, Grant launched the world's first "black" microwave oven, and 2012 launched the world's first "round" microwave ovens. In contrast, the United States for consumers on the microwave oven, "food dry and hard, bad taste," the complaint, put tens of millions of, research and development three years to launch the food God Steam, through the microwave heating water to produce steam, the food steamed or heated, to achieve a successful sneak attack.

Again, the long-term low-cost marketing strategy has also made it back to the low-end image of the hat, in contrast, the United States to do integrated marketing, and push high-end products, set up their own high-end image, which is also the difference between the strength of the two reasons.

The two enemies of grace and beauty, because they have chosen different development strategies and paths, have formed different brand images. Because always play price war, is dubbed "Price Butcher", in the eyes of consumers formed a low price, low-end brand image. It is not just the microwave oven, but also the low price marketing strategy for other household appliances. For example, in 2012, the company launched the price of 999 yuan 6 kg drum washing machine, only the same specifications of domestic brands of 1/3, foreign brands 1/5.

On the other, in marketing, in the early 2013, the "Top Chef" program of Oriental TV was invested heavily, and in July 2013, the exclusive name of Hubei satellite TV "My China Star" program, the CCTV set of high density advertising, and so on, began to combine their own products and consumer lifestyles, to promote a spirit.

In price, the United States and the grand are very different. Last April, the U.S. kitchen electricity announced in the department store to stop sales of 399 yuan of microwave ovens, in the home appliance chain to stop sales of 599 yuan below the products, to low-cost dour No. This March, the United States is to release the price of 20,000 yuan X7 microwave ovens, as well as the price of 1 million yuan smart overall kitchen SK1.

In the view of a shark, high-priced products are more like a gimmick, is to establish their high-end image, show their technical advantages. Although the majority of the sale or low-end products, but with this 20,000 yuan microwave oven, and 1 million yuan overall kitchen, consumers at one stroke and technical master linked.

In the category of expansion, and the United States has gone a different path. In the monopoly of microwave ovens, the power of air conditioners, washing machines and other white electricity field, but also go the price war. The beauty of the kitchen electricity in the microwave oven to obtain a certain status, but walk is the intelligent whole kitchen path, rely on intelligence, the Internet.

It can be said that the microwave oven is small, but because of its high frequency of use, in the kitchen electricity status key. This is like a router's role in a smart home. The importance of microwave ovens to the kitchen electricity, is a proud of a loss.

Small microwave ovens, but lasted more than 10 years of war. The grand and the beautiful, one left, one to the right, the end is doomed.