Comment from Peter Roberts
Bed maker AH Beard is a lesson in smart marketing and manufacturing excellence that should be a wake-up call for Australia’s larger manufacturing sector.
A few years ago, the company, one of the big three local manufacturing companies that dominate the bed manufacturing industry, decided not to engage in quality and cost reduction and to try to survive by competing solely on the basis of cost.
This has been the response of too many Australian businesses as imports poured into the country due to an end to protectionism, a high dollar and our borders completely open.
Instead, CEO Tony Pearson told me, “We made the decision not to be a low cost supplier.
“We have very consciously looked at how can we become materially different in a small market like Australia.”
So instead of establishing facilities in Asia and becoming a distributor of imported beds, Beard, which makes many brands of beds such as King Koil and Domino, did what many Australian companies gave up.
“We opted for high quality and high service, and we were able to sell our beds in Asia.”
In 2012, former Prime Minister John Howard officially opened the first AH Beard Bedding store in Shanghai, and today the company sells throughout the region, most recently entering the Thai, Hong Kong and Korean markets.
The company has more than 35 AH Beard brand stores in China alone.
Pearson said, “In Asia, an AH Beard mattress that sells for $ 25,000 in Australia sells for $ 75,000.
“There is a seven to eight times multiplier available.”
Beard has shipped two containers of mattresses per day to Asia in the past month, or 35,000 mattresses per year.
Of course, Beard uses the finest materials such as merino wool, alpaca and fine fabrics and finishes their premium products by hand, including hand buttoning.
The Chinese middle class craves exclusive imported goods and loves the Australian image of an enviable, high-quality lifestyle – why don’t we make good products and good beds?
The history of the Australian company is littered with the corpses of manufacturers who have responded to foreign competition by arguing for their low cost, cheap as well as attractive chips.
As Beard shows, there is another way, and this is the way for Australia,
Compete on quality, customer service and value, and support great manufacturing with great marketing.
Image: AH Beard
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