I am a master in India

Chapter 372 The Beginning of the New Century

According to the original plan, the pager should have had an engineering prototype by the end of last year.

However, this was Suer Electric's first project that was entirely developed in-house, and Ron overestimated the team's development capabilities.

He thought a small pager could be made with just a circuit board and a display screen; what could be so difficult about that?

Besides, there are so many assignments to copy; no matter what, you can learn by simply copying them.

Well, the painting is finished, but it looks nice but is useless.

Either the signal is terrible, or the battery life is a major problem.

Finally, it wasn't until April of the following year that a satisfactory design plan was finally completed.

Sure enough, conducting research and development in India is highly unreliable.

If even a large manufacturer like Suer Electric has encountered setbacks, then there's no point in expecting anything from others.

After taking office, the leader wanted to use a mere $200 billion to promote the upgrading of Indian manufacturing.

Damn it! Indians are born without a research and development spirit; they all want to take shortcuts, and no amount of money can change that.

Take Ron's little pager for example; it looks no different from the ones sold outside.

However, it cost Suer Electric tens of millions of rupees to finally get it done.

With no idea when the investment will be recouped, many people consider it completely not worth it.

"Is this the final model?" Ron fiddled with the machine in his hands.

“Yes, we’ve tested it. It works perfectly within the Mumbai metropolitan area, and we can even get a signal in the slums,” technical advisor Singh replied.

What about battery life?

"About 7 days."

“A bit short.”

"This..." Singh was truly at a loss.

The difference between domestic and imported products lies here: they may have all the necessary functions, but they are poorly tuned.

Motorola and Ericsson generally offer a battery life of up to two weeks, which is twice as long as theirs.

Technological accumulation cannot be achieved simply by spending money; Suer Electric's technology is at best at a kindergarten level.

"We'll produce a batch first, test it in major cities like Mumbai, New Delhi, and Chennai for a few weeks, and if there are no problems, we'll launch it to the market."

“Yes, boss.” Ashish accepted the order.

These three major cities are located at the southern, central, and northern latitudes and longitudes of the Indian subcontinent. Their different geographical locations and environments make them ideal for conducting real-world testing.

"By the way, what's the cost of our pagers?"

“It costs around 600 rupees. The RF chips and microprocessor chips are sourced from Japan, the LCD screen is ordered from Dongda, and we handle the rest—assembly, chip mounting, and battery casing—ourselves,” Ashish replied.

"Even the University of Tokyo can't handle these chips?" Ron asked Singh.

"This little thing is highly technological. Apart from Japan and South Korea, no other country in Asia has the ability to independently produce chips."

"Is that so?" Ron still missed the cost-effectiveness of Dongda University.

Unfortunately, apart from LCD displays, Tokyo University can't help Suer Electric much right now.

"What suggestions do you have regarding pricing?"

"After calculation, the marketing department believes that 1400-1800 rupees is more reasonable. Currently, pagers on the Indian market are all imported, and most are priced around 1800 rupees."

"If we start mass production, how much lower can we get in terms of cost?"

“About 20%.”

Based on this calculation, it seems that the pagers produced by Suer Electric are quite profitable, with a profit of 1000 rupees.

But this is the gross profit. After deducting labor, operating and tax costs, the profit margin is only three to five hundred.

"We'd better not consider the pricing of pagers in isolation."

"Boss, what do you mean?" Ashish asked, and the others were also curious.

"Don't forget that in India's mobile communications sector, pagers are required to be bundled with services."

"You mean bundled sales?" Ashish's eyes lit up.

"Yes, the price for the unlocked phone is 1600 rupees. But if you sign a bundled contract with India Mobile, you can get it for 1200 rupees."

"So much cheaper?" Cousin Ash was somewhat surprised.

"Don't forget the contract; they must use mobile communication services for two consecutive years, with a monthly package fee of 50 rupees."

Contract phones, well, these things are all too common in later generations.

At the height of competition, phones were given away for free, with the cost included in the package.

However, Ron wouldn't dare do that in India.

Try it for free. Believe me, once the Indian guy gets the pager, he'll turn around and use another operator's service, getting it for free.

Suer Electric can certainly produce a batch of specially made machines, directly locking the frequency band.

But software-level locks are useless. The Indian guy will disassemble the machine and flash the firmware directly.

They're not afraid of being sued for copyright infringement; that's just how the whole country is. It's a fool not to take advantage of a good deal.

Therefore, Ron only dared to offer some discounts, rather than giving it away for free.

The price of the phone without a case is 1600 rupees, while the monthly subscription fee from India Mobile is 30 rupees.

The contract phone costs 1200 rupees, with a monthly fee of 50 rupees for two years, and is non-cancellable.

Each has its advantages and disadvantages; it all depends on your choice.

Of course, the accounts between the telecommunications company and Suer Electric were settled as usual.

Either purchase at a fixed price or take a cut; each matter should be handled separately.

Ron's decision to offer contract phones was also for the benefit of India's mobile communications industry.

Without pagers, where would the customers come from?

Relying solely on service is not enough to compete with the telecommunications sector in the short term; it is necessary to expand the market and pursue a growth strategy.

Regarding the pager operation, Ron would hold a separate meeting with Indian Telecom. Suer Electric also had another new product to launch. Ashish, still carrying that conspicuous bag, had someone bring over a flat, box-like machine.

"VCD?" Ron's eyes lit up.

“Yes, we’ve tested it and it’s absolutely reliable.” He patted the machine on the table proudly.

How could it be unreliable? The technology all comes from Dongda University; Suer Electric just takes what's readily available.

The following steps were just as Ron remembered.

Press the eject button, the tray pops out, and the gleaming silver disc is inserted.

Soon, a Bollywood action movie that was a hit at the end of last year started playing on the projector in the conference room.

The picture quality is excellent, and the playback is very smooth, no different from the movies shown on the movie channel.

Some people might wonder, if they've subscribed to a movie channel, why do they still watch VCDs?
free!

What the movie and TV channel shows depends entirely on the TV station.

VCDs, however, are your personal possessions, and you can watch even old movies from many years ago repeatedly.

Furthermore, due to copyright restrictions imposed by television stations, the number of films shown on film and television channels is limited.

VCD players don't care about any of that; as long as you can buy them, you can watch adult movies without a care in the world.

In short, for movie buffs, VCDs are a must-have.

"Did we manufacture this ourselves?" Ron was fairly satisfied with the performance of the machine on the table.

"Yes, with guidance from the people at Dongda University, we finished it in two months," Ashish said smugly.

Ron sighed. Sure enough, the high efficiency was due to Dongda University.

What is your market analysis for VCDs?

“Boss, the technology and some of the production lines are from Dongda University, and the process is already very mature. We've estimated that if Suer Electric were to produce them, the cost per unit would be 4000 rupees, and a price of 6000 would be appropriate.”

"Is this the total cost, including labor and operations?"

"Yes, the price is six thousand rupees, mainly taking into account market acceptance."

Suer Electric's black and white TVs are only 4,000 rupees, and VCDs are already very expensive at 6,000 rupees.

While this device is best viewed with a color TV, the realities of India must also be considered.

To date, half of the televisions sold by Suer Electric are still black and white, and color televisions do not have an absolute advantage.

In order to increase market acceptance, Suer Electric internally discussed that the price of VCDs should not be too high.

This new gadget hasn't become popular in India yet, so it has to be sold at a low price.

It's not that India doesn't have VCD players; imported brands like Philips, Samsung, and Panasonic are available, but they cost as much as 10,000 to 20,000 rupees.

This means that only a small number of wealthy families can afford to consume it, while ordinary people have never even heard of it.

Under Ron's influence, Sull Electric's marketing principle was extremely clear: to make it affordable for most people.

A VCD player costing 14,000 to 15,000 rupees may seem to be about the same price as a color TV, but one is a necessity while the other is just an added bonus.

Their consumption priorities are different; it's not that if color TVs sell well, VCDs will necessarily sell well too.

If you want to expand your market, the key is still the same: target the general public.

Imported goods do have advantages in technology and quality, but Suer Electric's products are cheaper.

If you sell it for over 10,000 rupees, I'll cut it in half.

What does that mean? It means that the swallows that once graced the mansions of the wealthy and powerful now fly into the homes of ordinary people.

Yes, that's roughly the idea.

Put luxury items that were once exclusive to the wealthy in front of the general public and show them that they too can own them.

"That's right, this pricing aligns with our positioning. We can only make money by expanding the market."

"Yes, we also plan to collaborate with Suer TVs to increase our market competitiveness."

Over the years, everyone at Suer Electric has gained a clearer understanding of their own advantages.

Going up to the high-end market is difficult; it's better to focus on the lower and middle-tier markets first.

However, the days when a single black-and-white television set could generate a 100% profit are over.

As globalization accelerates, India is gradually lowering its tariff barriers, leading to increasingly fierce competition.

The profit margin per TV set has fallen to around 80%, and this trend continues.

The total cost of a VCD is four thousand rupees, so it's almost impossible to double the price.

It's too expensive; the Indian people can't afford it.

"Are there any other ways to reduce costs? What's the market like at Dongda University?"

“The situation over there is incomprehensible,” Ashish said, scratching his head.

"Why?" Ron asked curiously.

"The price of VCDs there is lower than their cost; they lose money on every single one sold. Those people are absolutely insane!"

"A price war?" Ron raised an eyebrow.

"Yes, it is said that they have tens of thousands of VCD manufacturers, and the market is already saturated."

Ashish has been frequently traveling to the University of the East in recent years and considers himself quite familiar with the area.

However, the booming VCD market still baffled him.

Some manufacturers have a production cost of 1800 yuan per machine, but sell them for 1780 yuan.

Isn't this insane? It's not like it's a monopoly. With tens of thousands of competitors, there's absolutely no hope of winning.

Ron listened with amazement. If Suer Electric hadn't become a large enterprise, he would have wanted to resell his products from Dongda.

Forget it, he doesn't care about this kind of quick money, and it doesn't fit his brand's style.

"Let's talk about CDs. VCDs alone are not enough; content is king."

Ashish got even more excited when this was mentioned; he had something to say.

(End of this chapter)