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Raymond YUEN
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YUEN is a finance professional with over 20 years practical experience in financial accounting, financial management and investment. He is a freelance trainer and grader. He also holds a PhD(Management) with research interest in market crash and Fractal Theory. He served Qualification Program of... More
  • Quality Is Client Loyalty And Client Loyalty Is Franchise For Business. 0 comments
    Mar 28, 2013 8:10 AM

    To attract client loyalty, cost is a consideration. However, quality is also very important. For sub-standard works, even if it is very cheap, it may not be able to maintain client loyalty. This is because sub-standard works may also jeopardize the quality of the product of the client.

    During Reform and Open Policy initial years, Wen Zhou was a manufacturing centre of electric appliances. There were thousands of small manufacturers of electric appliances. However, because of fierce competition, some manufacturers started to play the game improperly. They manufactured sub-standard products in order to cut costs such as where copper was necessary material, other metal was used. Other manufacturers followed to avoid being out-competed. Only a few small manufacturers insisted on producing good quality products.

    After a few years, the sub-standard electric appliances caused a lot of troubles in the PRC, including short life of the products or even life threatening fire and short circuit. As a result, the PRC government stepped in and closed a lot of these bad manufacturers and forced others to sell their business to good manufacturers.

    One of these good manufacturers hence grew into a big home appliance manufacturer from a small manufacturer (with 2 persons), its name is CHINT Group Corporation (in 2006, ranked 15th in 100 biggest electric appliance manufacturers in China with over 16,000 employees).

    Similar story also happened to the Wenzhou Dongfang Lighter Factory Co., Ltd. in lighter manufacturing business. There were over 3000 small lighter manufacturers in Wen Zhou initially. However, a lot of small manufacturers compromised the quality for cost whereas Dongfang concentrated in quality manufacturing. At the climax, Dongfang had market share of the over 20 percent of the world lighter industry.

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