- We want to produce a new product in China but we’re worried about copycats. What can we do to protect our concept?
LA: Ni hao! Most recent GDP per capita studies rank China anywhere between 82 and 97 out of 195 countries. This low position indicates that the Chinese market is hungry for growth and cash. Having a low GDP per capita is one of the main reasons why the Chinese business model – a few exceptions excluded – is to sell high volume of products at low profit margins. By doing so, they manage to keep the price of each product attractively affordable while they generate high profit from the overall number of large orders. This economic environment encourages greedy manufacturers to mimic any hot product that they can sell locally or to any willing market. And with a population of over billion people the chances of you coming across such manufacturers are quite high.
Register your brand and your Intellectual Property (IP) locally and in China before you approach any factory. Otherwise, they can legally manufacture and sell more copies of your product and the only decision you’ll have is whether to take the factory (or even factories) to court or not, which could cost you time and money equal to the lost sales. Alternatively, avoid China altogether and manufacture it in Europe, South America or USA to have less IP concerns. Naturally, your cost will be higher, however, you’ll have the image of your product not being made in China and the piece of mind knowing that the labor have not been offered poor wages and working conditions as many Chinese factories and workshops enforce on their workers…and that’s just my two cents.
- During seasonal occasions, should we just greet our customers or greet with an offer?
LA: How would you feel about a friend who every time he calls you on New Year’s Day he asks for a favor? Customers can see through your communication like how Superman can see through walls. If you want to greet, then be nice and do only that. Sending offers linked to public holidays and/or a seasonal occasion is a classic form of communication for marketers and there’s nothing wrong with it. The key to successful seasonal promos is to send the offers way earlier than the occasion’s date and earlier than direct and indirect competitors – indirect competitors are companies that compete with you on your customers’ share of wallet, but are not in the same industry you are in.
Let’s say that you want to offer customers a back-to-school promo. August is too late, June and July is Summer time and people prefer to spend their money on vacations or recreational activities with their children. Communicating with them in May might sound too far at first, but with the right promo and payment options you might guarantee future sales ahead of the season. A week before school starts, you can send a nice greeting note wishing your customers with kids a successful and stress-free school year. When you separate your communication like that, your customers will immediately recognize how your brand treats them with respect…and that’s just my two cents.
- Partnering commercially with others has its advantages and disadvantages. Overall, do you support the style of running a business with partners or of flying solo?
LA: Wabi-sabi is an ancient Japanese concept that values the beauty of things imperfect, impermanent, incomplete, modest, humble, and yet unconventional. By understanding that things in life are never perfect and they don’t last one gets to appreciate the flaws of everything around us. Business partnerships throughout the centuries have proven to be a great success and a great disaster. It depends on who you ask and when. Being a solopreneur also stood the test of time and brought many names the sparkle of fame and fortune, however, the walls of many street shops can tell you stories of countless business people who occupied these premises and faded away into the abyss of business history because they couldn’t thrive.
When you want to decide to shake hands with someone and work side-by-side you can only consider the circumstances at the time. Maybe if a company wanted to buy a share in your business at a time when you are in your glory years, you could refuse if you didn’t see much added value. If the same company offered you less at a time of struggle, you might sign the deal. If you’re the kind of person who likes to be in control all the time then running your own business without any partners or investors might be best for your personality but not for someone who only functions at his/her best when they have to report to a board. And within this circumstantial-based thinking lies Wabi-sabi, the beauty of the imperfections of each of these two options. If there’s any absolute fact in life it’s that everything is relative…and that’s just my two cents.
For Loaay Ahmed’s advice on business or work matters, send a short email to [email protected] Please note that only the questions chosen for publishing will be answered.
Loaay Ahmed is a management consultant and strategic expert. To learn more about Loaay and his consulting service, strategic business therapy, visit www.knightscapital.com.