Does CDR-King have a reputation problem?
My last entry about CDR-King sparked a heated debate among readers. It’s got to do with the fact that the company, which is well-known for cheap accessories and thing-a-ma-jigs, are now going into big-ticket items such as laptops, cameras, tablets and even windmills!
CDR-King started out selling blank CDs — where other stores were selling branded CDs between Php25 to Php100 a piece, CDR-King was able to sell un-branded ones to just Php5 to Php8 a pop.
The company expanded aggressively despite not going into the franchising business (apparently, all of the outlets are company owned).
The psychology behind the business model is that the items are practically disposable — they’re very cheap you can afford a percentage of the items you bought to actually NOT work out of the box. Sometimes, it is more practical to just thrown them in the trash than to spend on gas to drive back to their stores and get a replacement/warranty.
Due to its success in that front, CDR-King expanded its inventory to many other products — flash storage, networking devices, memory modules, electrical accessories, digital cameras, TVs, tablets, laptops and many more.
However, many of these items are already above the usual “affordable” bracket. In those brackets, customers are more sensitive about the brand, warranty coverage and after-sales support. The fact is — it’s very hard to put “cheap” and “reliable” as a label for a brand.
A friend, who’s into the import/trading business, tells me CDR-King has a 6% warranty provision with their suppliers from China. So for every 100 CDs they import, their Chinese suppliers give them 106 — the extra 6 is provision for possible damaged item.
So, when CDR-King went on and started selling “cheap” laptops, people became more wary about the unit and dismissed it as inferior. I think this is a reputation problem. It’s like having to convince people that 7-11 can serve a nice cup of brewed coffee which can actually beat Starbucks coffee in a blind test.
Then again, there are the thousands of customers who have had not-so-good experiences with their past purchases in one of CDR-King’s outlets. I know CDR-King is trying to improve their CSR by stating the standard warranty claims with each purchase a new customer makes.
Still, it’s a reputation that needs time to rebuild.
I think one way to measure the level of confidence people have on the CDR-King brand is survey what items they’ve bought from the stores. So what’s the most expensive item you’ve bought from CDR-King?