China Product development and product customization

After so many years working in the suply chain I have seen many different profile of buyer. I found out that depending on the compayny strategy, the purchasing strategy can be totally different.

I will discuss today about the electronics industry which is the one I know the best since I am initially an Electronic Engineer.

Electronic Industry is highly competitive and the technologies are constantly changing and improving. Hence, it loose value very quickly especially when the market get highly crowded by the competition putting pressure on the prices.

I have establishd mainly a few profiles to buyer purchasing electronic items in 7-8 different level as follow:

1./ The OEM buyer

This type of buyer is focusing on buying product on the shelf and selling it as it. It is usually oriented to low end market, with the minimum of added value and the focus is on the cost. Many buyers have this strategy and they experiment direct pressure from the compeition. Usually, the one that win is the one which get the cheaper price

 

2./ The light customizer

This type of buyer will try put its logo on the product to vehicle a brand while investing the minimum in customization and development. The competition is also quite high at this level because although a small customization is made, the final user is able to recognize an OEM product.

 

3./ The brander

This type of company will use a product on the shelf and will try to transform the packaging, the color, and will require to put a logo on it in order to try to swipe and hide the fact that product is an original design. Pressure on the price from the competition is still highly present but the fact to customize the product and the packaging allow to value a brand.

 

4./ The adapter or light developer

This type of buyer will use the base of an existing product and will develop a conex or related part to create a difference on the product. This difference can be used to translate a brand identity and value the product. At this stage the competition start to be a bit reduced and the pressure on the price is less important than for unmodified product

 

5./ The developper

This type of buyer is the one who is willing go on a differentiation strategy in order to swipe the price pressure issue and keep the margin high by having a product that nobody else got. He is also the one who is willing to master its product fully by having a full view of the supply chain

 

 

 

And you what kind of buyer are you ?

About Christopher Oliva 59 Articles
Christopher Oliva is an Engineer based in Shenzhen since 2008 involved in Product Development, Supply Chain, Sourcing, Quality Management and Manufacturing activities. With a Msc Electrical Engineering and a Business Administration background, an ISO 9001 Lead Auditor Certification, a Six Sigma Certification and a Quality Engineering Certification, he works as a consultant on mission and contract oriented to Product Development, Manufacturing Management, Quality Assurance & Quality Management System setup. He works in the product development and engineering field, and as well as an advisor and quality consultant for several quality control and quality assurance companies.