many manufacturers (i.e. the majority, by definition) make to what the broader (i.e. walmart, presumably) market demands and willing to pay for, else they would have been attrition-ed away per logic & mathematics, of course
at cross makes the vast majority of its writing instruments in china and they are fine
parker makes much in china
i use at cross, st dupont, pentel, and also a hero, and would say they are all on par
i do not use parker, because hero is better at the low-end and st dupont is better at the high-end
the shanghai hero (1 of 1997) writes as well as
... as the st dupont (S.T. Dupont Place Vendome 1 of 35 and 1 of 1810)
although both are somewhat less economic than pentel
whereas the china premier tends to fret for the point of it, my guidance to the global mass-market writing instrument makers continue to be engage w/ china production or go out of business, or go further up market then be m&a-ed by china-centric competitor
re making-to-market-demand
ft.com
In search of the right note
Mitsuru Umemama plans to set his company apart from Chinese and South Korean competitors by emphasising quality
Mitsuru Umemura had a prodigious talent for the piano. By the age of 10, the Tokyo-born schoolboy was tackling the works of Franz Liszt to the delight of his parents. But when his hands stopped growing in his teens at a span of just over an octave – well short of the typical 10-key reach of the professionals – he realised he would never be “another Oscar Peterson”.
It was then, having dabbled as a bass guitarist in a Beatles tribute band, that he decided his interests would be best channelled into a job at Yamaha, the world’s largest maker of musical instruments, which he joined straight from university in the mid-1970s. “It felt like a natural choice, as I’d been so familiar with music from the age of three,” he says. “I wanted a job that would allow me to contribute somehow to the culture of music.”
Since ascending to the president’s office six years ago, however, Mr Umemura has had a mostly torrid time. He has had to battle a slump in demand in mature economies, a squeeze on profits caused by the steady appreciation of the yen, and – lately – the effects of the slowdown in China, which has crimped demand in the company’s main target market. As a result, he has had few chances to dig out old favourites such as Frank Zappa or Led Zeppelin. He also has an acoustic guitar that he never plays. “It will probably have to wait until retirement.”
Yamaha’s woes are typical of many Japanese exporters, which have struggled to adjust to the post-financial crisis landscape. The headlines tend to be dominated by Sony, Sharp and Panasonic, the fallen giants of the electronics sector. But for many more midsized manufacturers of discretionary purchases, such as Yamaha – Namco Bandai in toys, Pentel in stationery or watchmaker Citizen – the past few years have not been a whole lot happier.
As the crisis began to unfold, Yamaha found that consumers in big developed markets traded down to cheaper, lower-margin instruments, while institutional customers such as concert halls and academies abandoned their usual cycles of upgrades. The domestic market, which accounts for about half of Yamaha’s sales, provided no great buffer, with Japan’s shrinking population placing limits on demand for everything from metronomes to flugelhorns.
Then there was the devastating earthquake of March 2011, which caused sales at home to sag further. It also damaged some of the company’s semiconductor factories enough to affect supplies of digital pianos and electronic keyboards to the US and Europe. All the while, the company’s pricing power abroad was being squeezed by a currency that – until the past few months, at least – did nothing but rise.
“Since the yen became so strong so suddenly, we weren’t able to adequately catch up,” says the 61-year-old Mr Umemura, noting that profits in Europe, which contributes about 17 per cent of the company’s net sales, have been hit particularly hard. “In the past couple of years, when the strong yen against the euro has seemed to be a fixed situation, we’ve been really hurting.”
The president has done the usual things, such as shifting production of lower-end models from Japan to cheaper locations in China and Indonesia while passing on about half of the currency appreciation to consumers via higher prices.
He has also cut production of sluggish lines such as portable keyboards and electric guitars, while occasionally dipping into cash reserves to add brands such as Bösendorfer, the Austrian piano maker beloved of Liszt, which he bought for its peculiarly “Viennese” resonance.
Now, he plans to overhaul the sales network in Japan, taking six sales hubs down to two and squashing eight retail subsidiaries into one, beginning in April. “Of the total of 2,000 sales employees in Japan, including our direct retail operation, we probably need half of them,” he says.
According to Yamaha’s latest forecast last month, it aims to break even in the current fiscal year to March, on sales of Y365bn ($3.8bn). That may not sound like much of an achievement, but it is better than losses totalling Y50bn over the previous four years.
The restructuring can only go so far, however. While demand remains fragile, says Mr Umemura, what will set the 126-year-old company apart from competitors such as Pearl River of China or Samick of Korea is its commitment to the finest standards of production. Or as he calls it, “high quality-ism”.
Every one of the 9,000 grand pianos the company makes each year at its plant in Kakegawa in central Japan, for example, takes about nine days to put together. It is only near the end of that process, after each instrument has spent a week in a seasoning chamber allowing the wood, ivory and leather to soak up moisture, that it gets its own, distinct voice. Bent over the keyboard in a soundproofed booth, a technician uses a special metal tool, squeezing and needling all 88 hammer felts in search of a smooth, consistent tone. It is a painstaking task, and one which brings production to a halt. But this kind of thing – a vivid illustration of monozukuri, or the art of making things – is vital to the brand. “From product design and manufacturing to after-sales service, we need to have a single, uniform standard of quality,” he says.
The company Mr Umemura joined in 1975 as a graduate of the elite Tokyo University was known as Nippon Gakki (“musical instruments”). It changed its name in 1987, to mark a century since the company was founded by Torakusu Yamaha, an odd-job man who discovered he had a talent for repairing, and later building, reed organs.
By the time of the name change, Mr Umemura had worked in sales subsidiaries in Sweden and Canada, encouraging colleagues to call him “Mick” rather than attempt his first name.
In 2000, he was promoted to run the US, and in 2003 he returned to Yamaha’s leafy, low-rise headquarters in the industrial town of Hamamatsu, a couple of hours south of Tokyo, as head of the musical instruments group. In September 2007 – with the shares at almost three times today’s levels – he got the nod to succeed Shuji Ito, another Yamaha lifer, as president.
A restless figure, he talks rapidly, his hands either clasped between his legs or carving the air, like a conductor. His pride in the company is obvious, from the tuning-fork lapel pin he wears, to his delight on discovering that my elder daughter’s membership of the school recorder club makes her a Yamaha customer.
. . .
He has no plans to step down after seven years, as his predecessor did. Mr Umemura still signs off emails by urging associates to “work together to create more music markets and more music-makers”. China, for now, is the focus. There, sales of acoustic pianos have soared as a new generation of pushy parents hopes to produce the next Lang Lang or Li Yundi. “It’s exactly the same phenomenon as we saw in Japan in the mid-1960s, when purchasing a piano was seen as a way of climbing the social ladder,” he says. “If your neighbour bought a piano for their child, you’d want to buy one for yours.”
The catch is that a Yamaha upright will cost at least Rmb20,000 ($3,212), which is about double the price of a Pearl River, the best-selling domestic brand. The only way for Yamaha to protect its margins in a fast-growing market such as this, he says, is to ensure that the logo remains a symbol of quality – even as this symbol of Japanese manufacturing pushes more than half of its production overseas.
“Whatever the product, whatever the price level, we need to assure customers that it is ‘made in Yamaha’.” |
