Cost Control In The Marketing Project Of Uhv Transformers In H Company

Currently there are more than 1200 transformer manufacturers in China and many, well-known foreign power transformer manufacturers have also invested factories in China. The situation has caused a rapid increase in the supply of domestic power transformer products, which leads to fierce competition among the manufacturers. In this case, the transformer manufacturers have to initiate price wars in order to improve their market shares. The time for negative profits has come. H company has been in the service of power grid construction for a long time. It treats product quality seriously and has a relatively high overall cost, which has affected its profits.The 13th Five-Year Plan for the state grid has emphasized the construction of Uhv grid in a long run in the future. Therefore, companies should seize this historic opportunity to improve their profits. In 2015, Uhv transformer orders accounted for 40% of all the orders in H company. As the main source of orders for H company to support its survival, it equals suicide to compete with other by means of raising prices and selling shoddy products. Under this circumstance, the only way to improve the company's profits is to reduce costs in the Uhv projects.Have realizing the importance of cost control, H company has established a leading group for cost control, which is responsible for the overall management as well as specific organization of cost control. It also proposed to strengthen the control on the consumptions of human resources, materials, and capitals within the scope of the company. However, since marketing has been treated as the input of of a series of work, its cost control has not been realized. This research clearly divides marketing cost into two types in terms of sales costs and setup costs with different emphasis. Pre-activities, current, and post-activities are used to control sales costs, and value engineering methods are used to control setup costs. In this way, it helps to realize the importance of setup cost in systematic cost management. This research proposes a set of maintenance mechanisms for cost control in Uhv marketing projects, which directs the activities in cost control. Specifically, from the perspective of cost management, this research suggests to establish marketing office of Uhv transformers, systematically combine cost management and marketing processes, decide strategic objectives of and the responsible person for cost management, which serve as the fundamentals. Applying methods in cost management to specific examples, this research explains sale costs using a combination of fix and rolling budgets, and earned value method. Percentage method and the value engineering method are used for setup cost. At last, project cost management concludes with an evaluation of the performance of cost control. This process is conceptualized as a "house model of cost control in Uhv marketing projects".