Thomas came to China again to discuss with Feng Yu on when they should introduce the Super VCD players.
Although they had agreed that Philips will not introduce the ordinary VCD players, but the Super VCD player technologies were ready. Thomas felt that it was a waste of time to continue waiting.
“Mr. Feng, we had agreed that we will introduce the Super VCD players in September, but the VCD player market is on the rise now, and the traditional VHS players are history. Should we bring forward the date for the Super VCD?” Thomas asked.
Feng Yu nodded: “Of course. There are no problems with technologies. We can introduce the first generation this year and the second-generation next year. But I suggest we should have differences in our exterior designs, like the position of the buttons and colors. But the remote control should be the same.”
“I understand and know that you Chinese likes red color. We will give up on red color and use other colors. We will use silver, grey and black colors mainly and two colors in a design. We can introduce 3 different models with different colors.” Thomas had already thought of the designs and chose the popular colors usually used for mainstream home appliances.
“Okay. Then we will give up a grey color and will use other colors to match it. We will use the same colors for the amplifier as the Super VCD players? Is it fine with you?”
The amplifier can also be called loudspeakers. It was one of the fundamental components of a sound system. It will amplify the sound to a better effect like a home cinema and karaoke.
The Philips amplifier is called an AV amplifier. There were 4 sound channels and surround sound. When people were watching movies, the surround sound will be more realistic and feels like watching a movie in the cinema. This feature was mainly designed to target consumers who like to watch movies at home.
AIWA’s amplifier was the HI-FI amplifier. Hi-Fi or High fidelity have only two sound channels and was most suitable to be used for music. This function main customer segment were the KTV, nightclubs, and lounges.
This technology was not complicated. Philips and AIWA had been producing speakers, and both companies had exchanged their technologies and upgraded their technology.
“Then what free gifts should we give out with our Super VCD players? Other than a music disc, should we still give out other things?” Thomas was asking for advice. Wind and Rain Electronics was better than them at promotions.
“Two microphones, a cleaning solution for cleaning the discs and a VCD storage box.”
“Mr. Feng, I know the microphones are for singing, and the cleaning solution is to clean the disc. Giving all these to our customers are normal. But what’s the use of giving out a VCD storage box?” Thomas was puzzled. It did not make sense to give out the storage box.
Feng Yu smiled and asked: “Mr. Thomas if you have a big TV cabinet at home and there is only a small TV on it. Won’t you feel uncomfortable? Will you want to buy a bigger TV to place in your TV cabinet?”
Thomas replied: “I will. But a lot of households can only afford smaller TVs.”
Feng Yu snapped his fingers. “That’s right. They can only afford smaller TVs. Although they wish to buy bigger TVs, they will not bear to spend the money. But the discs are different. A disc cost only 2 to 3 USD, and the more expensive ones cost 5 USD. Don’t you think those who bought the VCD players will not want to buy more discs when they see an empty VCD storage box?”
Thomas’s eyes brightened up and said excitedly. “Mr. Feng, you are a genius! That’s right! Many people might not be willing to spend money to get a new TV, but they can afford to buy discs to fill up the empty storage box. Even kids can afford. If there is only a disc in the storage box, most people will feel uncomfortable and will buy more discs to fill it up. We are two of the biggest supplier of original VCDs in the world. There is a high chance of them buying our discs.”
In Feng Yu’s previous life, he had experienced this. He bought a VCD player, and a disc storage box came with it as a free gift. He also felt uncomfortable when he saw one disc in the box. He also wants to fill up the box with discs. He can put the box aside, but he felt it was a waste. VCD storage box should be placed next to the VCD player.
The old TV cabinet was really a cabinet, and there were drawers at the bottom. But the newer TV cabinets were designed differently. There were 2 to 3 shelves and were used to place the VCD players or speakers. The drawer is at the bottom under the shelves, and it is for storing the discs or controllers.
Some of the TV cabinets have a plastic tray attached for storing discs. Those who own a VCD player will not get used to seeing the tray being empty. They will buy more discs to fill it up.
This disc storage box was designed for those who did not have a TV cabinet. After one box was filled, most people will buy a second box. This was to entice the consumers to spend more.
“Mr. Thomas, our biggest competitor in the disc market, is Sony. Our main market is in Asia, and your market is in Europe. We will surround Sony in the US market.”
“Ok. We must control the VCD market together!” Thomas nodded.
“How much is Philips’s retail price for the Super VCD player?” Feng Yu asked.
“400 USD? Will it be too high?” Thomas asked. The production cost of the Super VCD player was slightly higher than ordinary VCD player. The cost of the Super VCD player was about 100 USD.
The retail prices of VCD players currently were about 300 USD, and Thomas was worried that he had priced the Super VCD players too high.
After he finished, he saw Feng Yu shook his head.
“How can you price it at 400 USD? I think it should be priced at about 500 USD!” Feng Yu replied.
Ah? The price was not too high? Feng Yu felt it was priced too low? Thomas was confused. Why Feng Yu wanted to set the retail price so high? Was it to stimulate the ordinary VCD player sales? But Philips was not selling VCD players.
“Mr. Thomas, are you thinking that 500 USD is too high? Don’t worry. This is because our Super VCD features are much better than the ordinary VCD players. Also, the discs we are going to introduce will all bigger storage discs. Those normal VCD players might not be able to read them.”
“What I wanted is to create two tiers for VCD players, just like black and white TV and color TV. Color TV is priced more than double black and white TV, but many people still prefer to buy a color TV. The Super VCD player is considered the higher tier product in the VCD players. I will lower the prices of normal VCD players further to show the difference.” Feng Yu explained.
“You are going to lower the retail prices for the normal VCD players further?”
“The prices of normal VCD players will be lowered to about 200 USD. This way, the other VCD player brands will be beaten by us. They had opened up the market for us, but they are not allowed to take a bite of this cake!” Feng Yu smiled.
“Then when will we introduce the Super VCD player?”
“August 1st. It will be launch everywhere at the same time!”