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 Does CDR-King have a reputation problem?

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PostSubject: Does CDR-King have a reputation problem?   Tue May 17, 2011 10:13 pm

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?
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