Comment by Peter Roberts
Bed manufacturer A.H. Beard is an object lesson in clever marketing and manufacturing excellence that should be a wake up call for Australia’s broader manufacturing sector.
Some years ago the company, one of three large local manufacturing firms that dominate the business of making beds, decided it would not go down the road of cutting quality and costs and trying to survive by competing on a purely cost basis.
This has been the response of all too many Australian firms as imports flooded into the country as a result of the end of protectionism, a high dollar and our totally open borders.
Instead, CEO Tony Pearson told me: “We made a decision not to be a low-cost provider.
“We very consciously looked at how do we become materially different within a small market like Australia.”
So instead of setting up facilities in Asia and becoming a distributor of imported beds, Beard, which makes numerous bed brands such as King Koil and Domino, did what many Australian companies have abandoned.
“We went high quality, high service, and in that way we were able to sell our beds into Asia.”
In 2012 former Prime Minister John Howard officially opened the first A.H. Beard Bedding store in Shanghai, and today the company sells across the region, most recently entering the Thai, Hong Kong and Korean markets.
The company has more than 35 A.H. Beard-branded stores in China alone.
Pearson said: “In Asia an A.H. Beard mattress that sells for $25,000 in Australia, sells for $75,000.
“There is a seven to eight times multiplier available.”
Beard in the past month has been despatching two container loads of mattresses a day to Asia, that’s 35,000 mattresses a year.
Of course Beard uses the most beautiful materials such as merino wool, alpaca and fine fabrics and finishes its top-line products by hand, including hand-buttoning.
The Chinese middle class is hungry for exclusive imported products and they love the Australian image of a high quality, enviable lifestyle – why wouldn’t we make great products and great beds?
Australia’s corporate history is littered with the corpses of manufacturers that responded to overseas competition by aping their low cost, cheap as chips appeal.
As Beard shows there is another way, and this is the way forward for Australia,
Compete on quality, customer service and value, and back great manufacturing up with great marketing.
Picture: A.H. Beard
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