Abstract In the coated abrasive industry, the manufacturing field has always been calm and orderly, and the order of the manufacturing industry has been steadily moving forward. However, since April this year, the field of coated abrasives has quietly begun to decline...
In the coated abrasive industry, the manufacturing field has always been calm and orderly, and the order of the manufacturing industry has been steadily moving forward. However, since April this year, in the field of coated abrasives, there has also quietly started an unfair competition to obtain a larger market share by means of price reduction. Many coated abrasive manufacturing enterprises are involved. 
On the afternoon of May 17, 2016, the Coating Abrasives Branch Committee was held at Xiamen Bailu Hotel. The meeting invited representatives of manufacturing enterprises and product companies to attend the meeting, communicate and discuss the price competition of manufacturing enterprises, and study and discuss countermeasures.
Gao Bo, chairman of the Subcommittee Products Committee, presided over the meeting. Representatives of coated abrasive products companies and manufacturing companies have spoken and discussed the price cuts of some companies. Everyone thinks that the price reduction of the manufacturing volume is caused by the sluggish domestic and international economic situation and the lack of market demand. The competitive price reduction of large-volume products reflects that the problem of homogenization of coated abrasives in China has not been fundamentally Sexual relief, structural overcapacity problems are still outstanding. The entire industry still has a long way to go in terms of technological innovation and differentiated development.
Specific to this price reduction marketing, representatives of both manufacturing products expressed their opinions. Some representatives of manufacturing companies believe that price cuts may be the signal of shuffling issued by the market. The price cuts of products are conducive to the downstream; but the representatives of the products of most of the conferences believe that the practice of reducing market share by price reduction is also unfavorable and cannot solve the fundamental problems of enterprises. In the context of the current rising prices of raw materials and increasing pressure on environmental protection, price cuts may lead to a decline in product quality, which will also lead to turbulence in the downstream products sector, and therefore clearly oppose this price competition. Everyone agrees that price cuts are a marketing strategy, but it is impossible to solve the fundamental problem of market share. The fundamental way out of the industry lies in the combination of upstream and downstream innovation and the path of differentiated development.
At the meeting, Chen Tao, Sales Director of Baige Abrasives, Song Honglin, General Manager of Jiangsu Mitsubishi, Gao Bingyuan, Executive Director of Shanghai Wuzifang, Huang Guodong, Dongguan Golden Sun Consultant, Li Xinming, General Manager of Hubei Yuli, Xie Guo, General Manager of Sichuan Gurui, Jiangsu Chairman of the Board of Directors Wang Rongsheng, Zhengzhou Jiayu General Manager Li Wei, Changzhou Jinniu Sales Manager Qian Jianwei, Dongguan Dingshuo Director Lin Gang, Shanghai University of Technology Professor Chen Yubao, Zhengzhou Jiayan General Manager Zhang Runkui, Shandong Dongtai General Manager Gao Zhaodong, Suzhou Far East Chen Zhiyuan, deputy general manager, and Bao Hua, director of the National Abrasives Standards Committee.
Gao Bo: Disapproval of the practice of reducing market prices to gain market share
Recently, starting from April this year, have you noticed a very abnormal phenomenon: some companies have reduced prices. The price reduction products are not one or two, but multiple products and varieties, including GP-5 cloth, low-grade 51 cloth, page wheel cloth, sheet-type sandpaper, water sandpaper, dry sandpaper, including silicon carbide, mid-range belt. Cloth and so on, the endless drop, the dealers in the heart have no bottom. As a member of the industry, whether it is manufacturing, manufacturing, or distributors, we are a community. This abnormal price cut cannot but cause us to pay attention. So today we specially invited representatives of manufacturing companies to participate in the product committee, and raised this issue. Let's discuss it together.
Product price reduction is a legitimate means of marketing. In the past, the price cut was for a certain variety and a certain product. Therefore, for this sudden and substantial price cut, we would like to know for what reason, is the enterprise to be transformed and upgraded? Or is the industry overcapacity and insufficient market demand? At the same time, we also want to know if the manufacturing companies are competing to cut prices and whether they really understand the psychology and feelings of the dealers or the market. To be honest, under the current situation of insufficient overall demand and shrinking market, I do not agree with this approach of obtaining market share through price reduction. I have exchanged opinions with many product companies, and I have also asked many dealers. Everyone is also opposed. I agree that this is not normal and will destroy the entire industry. The Product Committee raised this issue today and hopes to draw the attention of everyone and jointly explore ways to deal with it.
Chairman of the Product Committee Gao Bo
1. Product price reduction is easy and it is difficult to go up. The price reduction of the manufacturer is very painful and it is a helpless choice, but it is also very painful as a dealer. The page round cloth is in the price cut. Last year, the profit of a hundred pages was only 1 point, 2 points, or even a negative profit, which was maintained by the manufacturer's rebate. Nowadays, such large-scale price cuts by manufacturers have formed a vicious circle of the whole industry, and it is so smoldering that it cannot cause the attention and thinking of downstream enterprises.
2. You have the ability to lower the price and have the ability to say that you will not raise the price in the future. Last year, raw material price cuts, manufacturing companies' profits increased, we have no opinion, but this year, according to my understanding, raw materials rose by 10% on the basis of last year, but for the market share, now the price of malignant reduction, there is also a sharp drop, there is a dark drop, then pick up What should I do? You can save it to 1 yuan per square meter. If you have the ability to increase your price for 5 years, you can see if you can afford it.
3, ordinary products compete to cut prices, vicious competition, if the mid-range, high-end, high-end products are involved, then we still need this industry?
When we are together today, we are going to explore this issue. Now it is not a question of which company, nor is it a problem of a variety, nor is it to blame a certain variety for price reduction. Innovative R&D is important, and rational competition is also important. As a dealer, we usually want to cut prices, but we don't want to pull down the price of each product, and it doesn't cause a wide-ranging or even vicious cycle. What we most want to see is that the price of the product has dropped and the quality has improved. For example, if you use a tearing cloth, you can drop it to 5 yuan per square meter, but no one can catch up with the effects of grinding degree and wear resistance, and even surpass Europe, America and South Korea to enter the international market. This is what we most want to see. We are very welcome and hope that the industry is like this. If the price cuts down the quality, or the vicious competition, this is the fire of the city gate, the fish and the fish, and we are brought in. In this case, we do not want to see it. I hope that everyone can reach a consensus here: not only the manufacturing plants, including our distributors, should be staggered, with different product positioning to achieve different market positioning.
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