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The agent of construction machinery in China still stay at the primary mode

Mar 01, 2019

The agent of construction machinery in China still stay at the primary mode.


Trade, is the primary business model for the construction machinery agents. It is a way of purchasing equipments and then selling them to customers, finally earning the profit difference. After-sales service, is also the agent's primary service mode. If the equipment has failed, the agents will dispatch personnel to repair, and by the way sell some accessories.


During the past 15 years, the market of construction machinery has developed rapidly in China.  China has become the world's largest single market in terms of output, sales volume and equipment possession. However, the model of marketing and services, the product-driven growth, for the agents still stayed at the primary level. At the end of every year, enterprises are looking forward to a huge increase in the market next year, so that they can sell more equipment. Many enterprises have also tried various "innovations" in equipment sales, just like the zero down payment, extended warranty, free service, free accessories, and free maintenance for life.


I don't know how many customers these concept of the “innovations”marketing have brought, but I just saw the post-market chaos caused by this. A large number of service personnel lost due to lack of the value recognition, and many old customers have took and  become the “backpackers”, and become a competitor of the manufacturers and the agents. A large number of customers lost after the equipment was out of warranty, which makes the service and accessories business become the pain of the agents. Facts have proved that the primary mode can not solve the pain points of customers, and a large number of customer lossing make the service become a loss-making business, making the post-market profit become a beautiful "legend".


 Whether you are willing to admit it or not, the incremental market will become a stock market soon, and by then the product-driven growth will come to an end. To achieve the sustainable development, enterprises must transform to the road of the service-driven growth. This is a new business model, that is, enterprises provide a variety of services according to the customer requirements. Equipment and products are just a link in the chain of the service value.As  Professor Michael Porter of Harvard University said in predicting the future, "All products in the future will exist in the form of services. In other words, services will almost become 'everything' and 'the everything of products'.


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Rogers Zhang