Home appliance maker German Pool has grown its annual sales in Hong Kong to HK$400 million over the past three decades. The company is also expanding fast in mainland China.
To achieve these results, the company clearly has done a lot of things right. One of the strategies it has been adopting is aggressive spending to build up the brand, founder Edward Chan Kwok-man said.
“If you think that when sales reach a certain scale, there is no need to do more advertising, that would be the wrong mentality,” Chan told the Hong Kong Economic Journal Monthly.
“When you reduce ad spending, people will start to forget your brand, and so we have to keep the exposure.”
German Pool sponsors cuisine shows, joins trade shows every year, and hold cooking classes, among other activities. Marketing expenses account for as much as 4 percent of total spending.
“You can never finish building up a company’s image, no matter what business you are in,” Chan said.
“When business is booming, the company will be able to afford a bigger advertising bill. And the more you spend on advertising, your brand can reach more potential clients and sales channels,” Chan said, calling this a virtuous cycle.
When the economy is tanking, advertising budget is usually the first to get slashed in most Hong Kong firms, but Chan does the opposite.
“During tough times, I spend more on promotion. Of course, one has to spend within his means,” Chan said.
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