6 Sept 2004
A Direct Approach(HKTDC Enterprise, Vol 09,2004)
Hong Kong Brands
A Direct Approach
Initial Brand Holds Firm
American Canyon Ltd
American Canyon Ltd has expanded into the manufacture of a full range of home digital electronic products
To transfer the merit of a developed brand name across a whole range of manufactured goods is no simple matter, but American Canyon Ltd (ACL) is doing just that.
For more than 20 years, ACL has been a market leader in the telephone segment of the electronics industry. Recently, a survey conducted by AC Nielsen revealed ACL as the leading brand in Hong Kong in terms of sales volume and market share for indoor cordless telephones.
The company is also well known around the Asia-Pacific region, including Singapore, Macau, Taiwan and the Chinese mainland, where it has several branches. Production takes place at a 10,000-square-metre factory in Dongguan on the mainland, which makes 20,000 cordless phones per month. About 60% of these phones carry the ACL brand, while the remainder are OEM/private-label orders.
"ACL currently operates a chain of more than 20 retail outlets in Hong Kong and we also have five shops in Macau," says general manager Eugene Hui. "The distribution network is also extensive on the mainland and in Taiwan and Singapore."
Hui says ACL has expanded far beyond telephones and telecommunications products to include a full range of digital electronics for the home.
"Products available now include audio/video equipment, DVD recorders and home theatre items, a range of digital cameras, LCD televisions, home appliances such as microwave ovens and fan heaters and rechargeable batteries and battery chargers," he says.
"Our brand name has carried over into the different categories of goods we now make," Hui continues. "It worked out well because having a brand already identified with one well known product and then trying to transfer the recognition to other goods is no easy matter."
He says that the new lines now benefit from favourable magazine reviews that help sales. "We market our products the way it suits us, meaning we don't spend millions of dollars on advertising. The principle we stick to is to be mass-market orientated - and for that we have to sell at reasonable prices."
In the case of DVD recorders, for example, the firm goes to market with retail prices ranging from HK$1,888-2,400, which is less than some high-end DVD models. "We do not manufacture the DVDs as the technology requires a lot of investment. We do not see that as part of our business, which is to provide good products and sell them under our brand name," Hui reveals.
"When launching our DVD models, we first targeted magazine reviews and happily every review was positive. We were in product shoot-outs with major brand names and some second-tier brands, yet we came out tops," he enthuses.
"It is also important to manage the image, so on our DVD models the traditional logo had some slight change from the stark rather typical font to a more hip alphanumeric style suiting today's visuals. A minor change but maybe an important detail," says Hui.
"We are taking the same approach with our other products, such as digital cameras, accessories and battery chargers. However, for the time being we are not in the MP3 segment as the market is too competitive."
The next question concerns translating undoubted regional success into exports to the US and Europe.
"This is what we hope to achieve, and to do that we need people who will distribute the product under our brand name in those markets," notes Hui.
The key, he says, is to first get people to trust you and your product quality. "People have to have confidence in you, and this cannot be achieved overnight. It all takes time."
WRITTEN BY TONY HENDERSON
American Canyon Ltd