13 Oct 2004
Hong Kong Enterprise
Hong Kong Brands
The NEX Generation
The Right Timing
Frontier Labs Ltd
Frontier Labs Ltd uses its NEX brand to promote its products in international markets
When it comes to portable music, the MP3 format is rated very highly. However, to retain or increase market share in this fast-growing and crowded market, companies need to brand their products to distinguish quality and performance.
Five-year-old Frontier Labs Ltd, which uses its NEX brand name to promote its products, is a good example of a Hong Kong company that understands the competitive nature of this business.
"We chose NEX because it represents change and moving forward," says chief executive officer Leslie Fong. "NEX represents the product value and services we offer our clients."
When Fong and his partners set up the business in 1999, with an investment of HK$4m, they had a clear goal: to design, develop and market audio digital products under their own brand name.
"Our ambition was, and remains, to focus on becoming another Sony," informs Fong. "To achieve that, we identify with the meaning of our brand and try to develop quality products that fit that image."
Few competitors existed when the business was first set up. "We had little to benchmark against," he recalls. "Today there are more than 100 different MP3 players on the market."
Fong believes it is important to define what the company is trying to achieve. "Successful companies start with the end in mind and employ a comprehensive strategy to get there - one that permeates through the entire company from the moment it is born."
He says a brand is more than a logo, a graphic or a slogan. "It is the imprint left on a customer's mind, his recollection of who we are, what we do, and the products and services we provide. It is not just about growth, either. Growth depends on the relationship with customers, while branding helps to develop a high degree of loyalty. Branding is really about staying ahead of the competition."
Fong says there is a misconception among many smaller companies that branding is only for big companies.
"Branding is not advertising," he asserts. "You do not have to advertise like big companies in order to have a successful brand. Your brand is as good as your market presence and how you encourage clients to consider you."
Developing a brand also requires accurate and speedy follow-up to customer requests and attention to detail. "We usually reply to email enquiries within one day of receipt and dispatch orders quickly from our inventory," says Fong.
To maintain this reliable production schedule, Frontier Labs subcontracts manufacturing to a specialist factory in Shenzhen on the Chinese mainland.
Major markets include Europe and the US, where the firm generates steady growth via the Internet. "As most of our clients are computer-savvy, we spend the majority of our advertising budget on websites, from where we receive our biggest response and feedback," Fong says.
On average, the company launches three new products each year, and bases a significant portion of its designs on customer feedback and online technical reviews. From concept to release, each new device takes about nine months to develop using seven R&D engineers and four sales and marketing staff members.
The company was also among the first to design and develop MP3 players without built-in memory. "NEX owners are able to use memory cards from digital cameras and other digital devices to store music and thus keep multiple cards with different music collections, voice or FM recordings," says Fong. "Our customer-research data indicates that this is a segment of the market where we can develop a loyal brand following that we can build upon."
Frontier Labs' new NEX IA+ and NEXKube digital audio players also use removable and expandable Compact Flash or Microdrive memory cards. "Currently, we offer up to one gigabyte as the main storage medium," explains Fong.
The system utilised by Frontier Labs incorporates a powerful digital signal processor and firmware upgrades that support multiple platform formats such as MP3 and WMA.
"The advantage of having no moving parts means extremely high reliability for our MP3 players, and this helps single us out as a leading brand," Fong says.
"The latest NEX products also feature a built-in FM tuner and voice recording facility. In addition to listening to your favourite music you can also listen to FM radio and use NEX for recording purposes," says Fong.
With its commitment to quality and service, Frontier Labs and its NEX digital audio devices are ideally positioned to continue delivering sweet music to a growing list of clients.
WRITTEN BY CHRIS DAVIS
Frontier Labs Ltd
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