Extraordinary Genius Chapter 836

Extraordinary Genius

Chapter 836 - The ones holding them back

"Guangzheng, thanks for your hard work. We hadsuccessfully entered the European markets." Feng Yu and Fu Guangzheng weresmoking cigars and drinking champagne.

All the Chinese beverage sales in the USand Europe were handed over to a company, Beverage Major League, and Feng Yu isthe owner of this company.

This company is not a company that focuseson making profits. It is set up to market the Chinese beverages into theoverseas markets, and this is the reason why Feng Yu did not ask Fu Guangzhengto invest.

But Feng Yu had acquired 5 bottlingfactories in the US and Canada, and Fu Guangzheng bought a few bottlingfactories in Europe. Fu Guangzheng also felt Chinese beverages can establish afoothold in Europe.

If the Chinese dairy products were able tosecure a place in the overseas market, Feng Yu and Fu Guangzheng would continueto acquire dairy product factories in the western countries.

"This is nothing. But can those Chinesebeverage companies afford the losses? They will surely suffer ma.s.sive lossesthis year, and they might not see any profits next year." Fu Guangzhengreminded.

Opening new markets require huge capital.Not only the companies had to incur the marketing fees, but they also have topay the supermarket chains, high transportation, and storage costs.

There is a heavy price to pay forintroducing new products into the market, and not everyone can see the returns.In Feng Yu's previous life, Coca-Cola had failed in introducing their teabeverages in China after investing a significant amount in marketing. Coca-Colahad strong distribution channels and used aggressive advertising, but they wereno match for Kang s.h.i.+fu and other Chinese Tea Beverage manufacturers.

"This BML company is not earning a singlecent from them. If they are not willing to take the losses, I will also notforce them. At least, Jianlibao, Qili, and some tea beverages are doing well.Just these brands alone are worth what I am doing."

Problems arise in alliance easily. Thosecompanies were given advantages, but they will feel that they had lost out.

"The problem is you are not making moneyfrom them. The more you are not making money from them, the more they areasking. They do not care what you are thinking. After all, you are ashareholder of Lehaha and Jianlibao. You say you are doing this to introduceChinese beverage brands to other countries, but they will think you are makinguse of their brands to increase the compet.i.tiveness of Jianlibao and Lehaha. Ifnot, why the promotions for their brands are not giving out electronic productsand cars as prizes?" Fu Guangzheng shook his head.

"Those prizes are sponsored by me, and theyare not paying for them. It is my choice which brand I want to sponsor, andthis has nothing to do with them. Why should I help them?"

Feng Yu finally understood why people saybusinessmen are greedy and ungrateful. Although he was using those brands toincrease the Chinese beverages' compet.i.tiveness, those brands also stand togain from this.

Those companies do not care about openingthe Western countries' markets. They thought they would make high profits ifthey could export their products.

But now, they were making losses despitehaving high sales. Their brand awareness had increased, but what's the use ofhigh brand awareness without profits?!

Feng Yu was frustrated with theseshort-sighted people. Luckily, Zhong Qingxian and Li Jingwei supported Feng Yuas they understand the importance of market share and branding.

It's fine to suffer losses in the initialphase. Zhong Qingxian and Li Jingwei were prepared to see losses for the first2 to 3 years. But once they were established in the western countries' markets,they can recover all their losses in the future.

Lehaha and Jianlibao's profits from theirdomestic market can ensure they will not have cashflow problems. Among thecompanies in the alliance, Taiwanese brands, Kang s.h.i.+fu and Tongyi, created themost noise. They felt their tea beverages were not marketed well enough, andFeng Yu was discriminating against them for being Taiwanese brands.

Discriminating them? If Feng Yu wasdiscriminating them, they would not even qualify to enter this alliance.

Kang s.h.i.+fu and Tongyi might be successfulwith their instant noodles, and Tongyi is currently one of the world's topinstant noodles company. But these two companies' beverages were not doingwell.

Both companies only have tea beverages, but.i.ts taste cannot be compared to Lehaha, Le Bas.h.i.+ and Jianlibao's products. Theydid not spend much money and they should be glad that the supermarket chainswere willing to sell their products. They still demand the advertis.e.m.e.nts tofeature them? We asked you to partic.i.p.ate in the Another Bottle campaign, whydid you all refuse?

These two companies felt since they werenot partic.i.p.ating in these promotions, Lehaha, Le Bas.h.i.+, and the rest of thecompanies should not do these promotions, as it will cause infighting.

At this time, these two companies increasedtheir productions and start to fight for market share in China. They startedselling their products to the various villages, counties around the cities andpriced their products 50 cents cheaper than Lehaha, Le Bas.h.i.+, etc. teabeverages. Your products are selling at 2 RMB? We will sell ours at 1.50 RMB!

Feng Yu cannot stop them from doing this,but the problem is these two companies start to lower their supply of goods tothe US!

Their excuse was they had to supply goodsto the Europe supermarket chains, and the demand in China had increased. Theirproduction cannot keep up but promises their supplies will resume the followingmonth.

These two companies could not make money inthe US, and even though they were selling their products cheaper in the Chinesemarket, they could still see profits as the transportation and storage costswere much lower.

Even idiots know which side to choose. Theyhad also gotten what they wanted. They had entered the US and Europe market andhad an increase in their sales.

These two companies want to wait out in theUS market. If they can still get the same sales figures without advertising,they will see the profits.

It would be great if their sales canincrease.

What these two companies are doing is todrag things out. They want to enjoy their brand exposure and refuses to pay theadvertising cost and lower their supply to minimize losses. This way, they willincrease their brand awareness in the overseas market.

By placing their products besides the famousbrands, their brand awareness will surely increase.

Based on the alliance agreement signed, anycompanies that cannot keep up with the supply will have to withdraw from the USand Europe markets. But Kang s.h.i.+fu and Tongyi did not follow the rules andrefuses to withdraw from the alliance.

Feng Yu was furious with these twocompanies. He felt these two companies should be given a warning. There aremany tea beverages in the market, and since you two don't follow what wasagreed upon, then don't blame me for attacking your products in China!

Feng Yu called Zhong Qingxian and LiJingwei. He asked them to warn Kang s.h.i.+fu and Tongyi. They must provide therequired volume of goods, or they will be pulled out of the Western countries'market and have to pay compensations.

But before Feng Yu could act against these two Taiwanese brands, the two Cola giants start to retaliate.