How Far Prices Matter on Current Market ?
Sorry if putting on this thread. As a Financial People, me and some of my colleagues always intrigued on how far Price become factor toward decision making on any procurement. We then make some assessment with each of our customers to see how far Price determine their decision making process. Especially within current increasing competitive market.
We assess our clients from multiple industries, from Airlines, Shipping, Logistics/Transport, Manufacturing and services. We don't go with Defense Segment, due the different nature. It's more on commercial decision making. However I do see matter related to commercial due influence in Defense also.
Our assessment shown under current market situation, Reliability and Support are matter more compared to prices. This even becoming matter on foreseeable future.
I put an article that I sense shown how the market thinking work, even with consumers decision making.
Berikut ini rapor penjualan mobil China di Indonesia periode Januari hingga Nei 2021. Lebih laris mana, Wuling atau DFSK?
otomotifnet.gridoto.com
Sorry the article in Indonesian, however I put example of two Chinese Automative brands. One call Wuling the other call DFSK. Both are New comers not only in Indonesia but also in ASEAN. Both build factory in Indonesia and use it to export to other ASEAN market asside on Indonesian domestic market. Both also have around similar market share in China. Both also facing Indonesian and ASEAN market that already more or less Japanese minded.
Wuling able to sell 3 times then DFSK not only in Indonesian market but also toward other ASEAN market. Eventough they are practically begin in similar time table. Both coming from China, main product is SUV, have similar capabilities and price range.
Wuling able to do that by rellied on two things: Distributions channel and Brand concious. One thing that Wuling has that DSFK hasn't; Wuling is GM JV subsidiaries. DSFK is pure Chinese company. Turn out in some ASEAN market, they sold their cars under Chevy brand instead. They also quite agreesive on building support and distribution network.
However the Japanese still outstrips their sell so far, eventough their price in average is 20% higher for similar product. Consumers still not convince that Wuling (even in some market using GM brand), can provide similar reliability thus in the end resale value in future, when they decide to trade the car.
I know it's not Aircraft, and there'll be question why I put it on Aircraft prices thread. However when I talk with Airlines people on potential their attraction toward C919 and MC-21 compare to 737MAX and A320, nearly all of them saying they will stick with Boeing and Airbus for sometime. They'll need at least another decade to be convince with COMAC and Russian Aero on their ability to provide products reliabilities and capabilities for after sales support.
For defense, Political factor matter more. However if the decision makers facing products that provide more or less similar Geopolitical choices, then factor of support will kick in.
I put in this thread since I still see in many forums where ppl making conviction that Lobby and Price matter more. This thread seems when created close two decades ago, also talking more on Prices as a main factor.
So as conclusion on my ranting, just want to shown decision making from consumers, commercials, and even defenses are more and more influence by reliability and support factors. Political matter more on defense, then commercials, then consumers in that order. However matter of fleet commonality, reliabilities and support become more important even in defense decision making.
www.janes.com
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