Thursday 28 May 2015

Design vs. Price

It has long been KT Group ethos to be a company with design before cost and it has been one of the major contributors to our 10 years of growth we have been privileged from support of the clients who have bought into our designs

Most of our clients as our competitors as well know the company utilizes manufacturing in China to stay cost effective,  and together with our primary metal manufacturing partners who are experts in field of metal manufacturing known for also working with likes of IBM, Flextronics, Samsung but to name a few giants our metal partners also manufacture enclosures and cabinets for KT Group has shaken off any question to the quality that we invest into our products which is critical to gain customers respect as well as support and with most of our clients being at least midterm relations which last anywhere from three to six years that does encourage us to further our expansion to be a dominant market leader in custom design work we manufacturer. 

One of the biggest challenges we face is hurdle of initially getting clients to fully understand what it is they receive in value of price when they compare an offer based on say a Sports Betting Terminal like Beast or Whizz in comparison to say a competitor’s model.    In a global commerce that is linked by World Wide Web we as a company deal with business owners and appointed technical management teams for their companies on a regular basis and when we work with technical savvy CTO and Technical Directors ask them cost of developing software, implementing equipment API into their software and YES there technical astute to level of knowing costs but when we deal with cost of engineering and mechanics of a metal enclosure most clients have very little knowledge in costs to manufacture a metal enclosure.  

Cost of metal manufacturing is relative to several steps that are required to manufacture a finished enclosure, broken down they include

A.      Cost to develop a unique design, more talented your designer is the higher price he or she will charge for their work.
B.      Cost to take a design and turn that design into a 3D modelling file,  more challenging enclosure the higher cost the engineer will charge as not everyone is able to
C.      Cost of BOM (Build of Materials) required
D.      Machinery required to manufacture design,  not all metal production places have necessary equipment so the more advanced equipment location has available cost increases
E.       Amount of labour required,  here it is related primarily to welding and polishing process
F.       Powder or Spray Paint finishing,  what type of painting finish can be applied at location
G.     Cost to assemble enclosure,  more complex more resources hence cost increases
H.      And even quantity of machines required to build, here it is not commonly thought of if your assembling 25 terminals contra 200 terminals in one production does the company have manpower and resources to complete job in reasonable time period say 4 weeks.

So when sales team at KT Group face buyers from different locations all over world we are prone for labelling certain autonomous regions with buyer tag of Easy to Hard because it is commonly perceived that for example Buyers from Middle East or Former Soviet Republics are price conscious buyers to extent it is opinion of KT CEO that they can in turn hurt their own business enterprises because fight for each dollar spent per machine.

In a recent example given KT was appointed by a firm looking for Sports Betting Terminals, they themselves had prepared a sports betting terminal design which they presented to our team. Design was very much what I would term a BOX enclosure which we politely undertook the job to manufacture initial 50 machines for them but we had proposed to prepare one of our own unique sports betting terminal designs which they felt was not needed.  After delivery had occurred we were called to meet with them to follow up for future orders and although initial shipment was approved both from aspect of metal manufacturing and technically that they were positive to proceed to step 2 the next order what feedback from our clients customers were that design had to be in fact redesigned as it was dull and boxy as they put it.   KT created BEAST and after the initial second order was delivered I come to point of the story our customers sales increased so much so that they not only continued to order they in fact went from buying initial 200 terminals they had in mind to deploy to more than doubling the figure to 500 because users were attracted to play on BEAST betting terminal contrary to other installed machines from other vendors.

Design has especially in past 20 or so years as technological advances in manufacturing have improved whether you buy a fashion conscious handbag label from one of the world elite designers,  or put yourself behind wheel of a Ferrari super car,  decide to take a premium holiday in an establishment known for its reputation or buy a design that steps out of mainstream and into a whole new genre it stands out and that creates emotions in us as socialholics to wanting something different and the return given outweighs cost on most occasions.