Can a Small Business Survive? (1)

I think this is a good opportunity for me to analyze a small company where I worked as an intern before by using the marketing concepts that I learned and I am really excited about it!!

Let me start with some basic background of this company. It is a small, local appliance store call FJ (for short) in a small place beside Shenzhen, one of the big city in south China. The store mostly sells big appliances like television, air-conditioner, refrigerator and some small appliances as well. It was the biggest appliance store in that place before Gome and Sunning (the Bestbuy and Futureshop in China) captured the market. Now, FJ is suffering through a hard time.

(part of the store)

I’m really interested about how a small business like this can survive through the pressure and challenge from the big companies. Will these small businesses survive by finding a new way to capture the market or will they leave the market finally?

So now I am going to analyze this company and try to figure my questions out probably throughout the term.

Where do the customers come from and what are they looking for?

Since both the big and small companies seldom distribute flyers and most people in that area won’t go online and check the deals, I think the major customer group come from the people who live around the store and people who regard FJ as a local “old-brand” and this kind of people are mostly “after 60, 70”. For those who are “after 80”, most of them believe in “famous brand” has higher quality, not only products, but also stores.

(Vikapedia: In China, people have different name for generations. For example, for those who were born after 1960s, before 1970s, people name them “after 60” and so on and so forth. Uncreative, ya, I know 🙂 )

Because of the average per capita income in China is around $3700 per year, people don’t make quick decisions while buying big applications. They always look for the best deal, which means low price with as high quality as possible. However, due to the underdevelopment of IT in China, customer mostly receive product information from sales people. Therefore, they probably will go to different stores and inquire about a product for many times before making the decision.

I will continue the analysis next post.