Brand strategy based on channel development trends
1. One of the channel development trends: the proportion of KA channels is increasing
The development trend of KA channels In the following aspects: KA channel sales will account for an increasing proportion of overall sales, and there will be more and more regional markets with a high proportion of KA sales. With the rapid development of the economy, the pace of KA store openings will also increase. It will gradually accelerate. In the past, Carrefour stores were concentrated in economically developed first-tier cities such as Beijing, Shanghai, and Guangzhou. Now there are several stores in many prefecture-level cities. In the future, they will gradually open to county towns. Now they have opened in many counties and towns in East and South China. Many national and national KA stores have been established, and the cost of KA will become higher and higher. It will become increasingly difficult for traditional enterprises to make money. This trend will not change according to our will. We must face this problem head-on. To find a fundamental solution to this problem, instead of avoiding this problem and developing county and township channels in depth, and doing what we learned from Chairman Mao, "rural areas surround cities", then we will retreat from first-tier cities to second-tier cities, Then retreat to third- and fourth-tier cities, and finally have no choice but to go up to the mountains to fight guerrillas.
2. Channel development trend 2: The development prospects of convenience stores are extremely broad
China has a large population and huge consumer demand, which to a large extent has led to the development of convenience stores. Come opportunity. According to the development experience of the convenience store industry in developed foreign countries, on average every 2,500 to 4,000 people should have one convenience store. Based on this ratio, China's future market prospects are extremely huge. In some economically developed regions and cities such as Shanghai, Beijing, Shenzhen, Guangzhou, Suzhou, Wuxi, Ningbo and other places, including many provincial capital cities, the basic conditions for the development of convenience stores are fully prepared. Their socio-economic development level and consumer Income levels have even entered the maturity stage of convenience stores, and these places have therefore become the earliest and fastest developing places for convenience stores in China. In addition, there are many regions whose economic level is close to the introduction stage of convenience stores, which will definitely provide broad space for the development of convenience stores in the future.
Convenience stores themselves have many advantages such as small but refined products, high profit margins, small radiation range, convenient procurement, and closeness to consumers. They are very suitable for my country's current economic development level. In the future, with the improvement of social and economic living standards and changes in consumption concepts and methods, people will have more and more demands for convenience stores, and convenience stores will also make great achievements, and they will definitely become the future of our country. Another main format in the retail industry, small, fast, time-saving and effective convenience stores will surely replace supermarkets and become the main commercial business entities in urban communities. Effective market efficiency strategies will usher in the development of my country's convenience store industry. A better tomorrow.
The standardized operation of convenience stores and the habit of consumers who go to convenience stores to buy designated brands mean that the products in convenience stores are basically mainstream brands, and they are the best-selling items of mainstream brands. Only in this way can we be competitive with supermarkets. This is the connotation of convenience stores having fewer but better products.
3. Consumers’ brand awareness is constantly strengthening
In the 21st century, the Chinese market is increasingly emphasizing the personalization and sensibility of consumers. This is a result of the continuous development of the economy. inevitable product. Marketing has gone through the production stage, the product stage, the promotion stage, and now the marketing stage. The reason why there are these gradual stages is due to the continuous changes in consumer needs. Strengthening the brand, especially for companies in the field of fast-moving consumer goods, will be a very important task, and the benefits it will bring will be huge and long-term. For example, the brand of herbal tea, Wanglaoji, has brought huge guarantee to its sales, not to mention World-class brands like Coca-Cola.
With the rapid economic development, consumers in my country's big cities have developed a strong awareness of brand consumption, and brand awareness in small and medium-sized cities and rural markets is also rapidly increasing. A survey agency conducted a nationwide online survey on brand awareness in 2005. The result was that 58% of consumers attach great importance to the brand, 35% of consumers attach great importance to it, and only 6% of consumers choose not to. How to pay attention to it and 1% of consumers choose not to pay attention to the brand at all. From the survey results, it can be directly seen that more than 90% of consumers in China currently have strong brand awareness, which is also the basis of modern brand competition.
4. High gross profit and high traffic are the fundamental ways to solve the above problems
There are two fundamental ways to deal with the development trend of KA and convenience: high gross profit and high traffic.
High gross profit: In order to achieve this goal, in addition to product differentiation, brand building must be strengthened. Only strong brands have the power to achieve high gross profit. Strong brands first need planning and personality; second, they need Invest. Brand building takes time, but first we must have the awareness to build a strong brand, and secondly we must have the method to build a strong brand.
High traffic: There is high gross profit but no high traffic. The gross profit generated is not enough to offset or dilute the channel expenses. To be like Procter & Gamble and Nestlé, it has both high gross profit and high traffic. According to statistics, the sales of a certain international brand in a few first-tier cities is the same as the total sales of other domestic brands in all provincial capital cities, and in the cities where it is concentrated, the market share is almost the same as that of domestic brands. Several times that of a brand.
Another way to achieve high traffic is through mergers and acquisitions.
On October 1, 2005, the largest merger in history: Procter & Gamble acquired Gillette for US$57 billion. P&G has 23 brands with annual sales of more than 1 billion US dollars. Olay, Pantene, Head and Shoulders, Wella, Shubao, and Gillette are well-known in China. For P&G, scale means something extraordinary. If P&G's brand is not strong, it is likely to be squeezed out by retailers who have the right location and right people. Therefore, on the one hand, P&G is eliminating those brands that do not have advantages, and on the other hand, it is increasing investment in strong brands.
5. Successful brand strategy means high gross profit and high traffic
Based on the analysis of the development trends of KA and convenience stores, and the analysis of the continuous strengthening of consumer brand awareness, a A strong and personalized brand will be the core work to deal with this trend. We must believe in the power of the brand. The brand is the guarantee of high gross profit and the brand is the guarantee of high traffic. Of course, brand building requires a process.
The CEO of the beverage giant Coca-Cola once said three thought-provoking words: "What we sell is water, and what consumers buy is advertising." "If a fire burns out Coca-Cola, the second God, I can create another Coca-Cola!" "Coca-Cola is 99.61% carbonated, syrup and water. If there is no advertising, who will drink it?"
In response to the above three sentences? , people can't help but ask three questions: "What turned water into Coca-Cola?" "What was left of Coca-Cola in the fire?" "What is the remaining 0.39% in Coca-Cola?"
There is only one answer to these three questions - brand.
6. Brand or channel, the key difference between foreign-funded and domestic-funded marketing strategies
A key difference between foreign-funded enterprises and domestic-funded enterprises in marketing lies in their understanding of the importance of brands and channels Different and the marketing strategies derived from them are different.
Foreign-funded enterprises pay more attention to brand building. The northern region marketing director of a foreign-funded daily chemical brand is responsible for the regional annual sales of 1.5 billion, of which more than 200 million is contributed by the new brand, but its advertising expenses All of the investment was invested in new brands, with the amount reaching nearly 150 million. Old brands are increasing their sales performance through intensive cultivation of channels and extension of product lines.
Domestic-funded enterprises pay more attention to the construction of channels. The most typical words include "those who win channels will win the world", "those who win terminals will win the world", and "rural areas surround cities", all from the perspective of channels. Wahaha has reached the pinnacle in this aspect. Zong Qinghou labeled Wahaha a "very marketing" label. It is not difficult for experts to find that "very marketing" is not actually "very". It is just a combination of marketing. The channel elements are brought into full play. Just like Sanzhu in the past by painting walls and sending singles to the rural market, Wahaha has focused all its efforts on channels. This is the capital for Wahaha to settle down. If this capital is overdrawn, the Wahaha empire will collapse in an instant. In the development process of Very Coke, it has been shown that this strategy is difficult to achieve: Ten years have passed, and "Very Coke" is still following Zong Qinghou's strategy of "surrounding the city from the countryside" in rural areas. The market is constantly spinning around the city, and I have never seen how "Very Coca-Cola", like a revolutionary, has invaded retail supermarkets in first-tier cities on a large scale and squeezed out "Liangle" from the shelves. Even the derisive words "very funny, very funny" have been forgotten by people.
In categories other than cola, in a sense, Wahaha’s success is not because Wahaha is too strong, but because its competitors are too weak. The reason why it is difficult for Very Coke to succeed is because there are two world-class competitors, Coca-Cola and Pepsi-Cola. Not only are these two competitors not inferior to Wahaha in terms of channels, but they also lag behind Wahaha in terms of brand building!
Many domestic enterprises do not fully reflect the core competitiveness of their products and brands when planning their products. As a result, the company spends a lot of channel promotion expenses to promote its development. To some extent, even if these products We have achieved a lot of sales because the power of the channel is so great that it is difficult to lose sales. Such courage cannot be achieved by small businesses. In this sense, companies that seem to be very big now actually win by scale, not efficiency. To put it bluntly, they win by brute force, not wisdom. win. The sales of dozens of single products of a domestic brand are not equal to the sales of one or two single products of a foreign brand. How big is the difference in efficiency.
The indicators of good channels are nothing more than the following: distribution rate (number of outlets distributing goods), vivid display (including location, size, publicity, and tasting), single products on the counter Count etc. With Wahaha's position in the world, it is not difficult at all to achieve the same channel performance as Liangle. The problem is that even if Very Coke achieves the same channel performance as Liangle, how far will its sales performance be compared with Liangle? Woolen cloth? I think the results speak for themselves.
Through the above analysis, at present, it is temporary for domestic enterprises to gain advantages by relying on the power of channels or relying on large amounts of human and material investment in channels. This temporary period may be one or two years or even two or three years. But after all, this is a relatively inefficient behavior. When foreign-funded enterprises conquer cities and territories one by one, domestic enterprises may have no choice but to abandon them one market at a time.
7. Brand strategy is the only way for domestic enterprises to become strong
Many domestic enterprise owners believe that building channels and sales is about making money, but building a brand is about spending money. As a result, some bosses are busy with market channels and terminal promotion all day long, but neglect brand building; as a result, the sales department is always quarreling with the marketing department/planning department/brand department, because the former always feels that the latter is spending money indiscriminately.
As everyone knows, building a brand is not just about spending money. When brand building reaches a certain stage, there will be a "spillover effect", which will bring a steady stream of market sales and cash flow to the enterprise. Although there is a joke in the industry that "if you build a brand, you will die, if you don't build a brand, you will die." However, as product homogeneity becomes increasingly serious today, it will be difficult for companies that do not build brands to become bigger and stronger, and they will inevitably be dead in the face of a financial crisis.
“The deepest enemy is not your competitors, but the immediate interests of manufacturers.” This is a famous saying that can calm down impetuous domestic enterprises. Channels can only make you money today, but brands can make you money in the future. Which domestic enterprise does not want to have a long-lasting business and become a century-old store. It only sees short-term benefits and spends a lot of time on channels but is reluctant to invest in brand building. It is impossible to build a century-old enterprise by investing money in the market.
Habit is the most powerful force. It has a kind of inertia that drives a company and an entrepreneur to go in the wrong direction. Entrepreneurs can often find reasons to do this: world-class brands and companies have accumulated over decades or hundreds of years, and Chinese companies have just started, so this is a process that must be experienced. But an obvious fact is generally ignored by Chinese entrepreneurs, that is, world-class brand companies such as Procter & Gamble and Unilever had a difficult time getting started, but they have been unswervingly growing for decades. We have embarked on the arduous road of building a brand-oriented business. Because they clearly know that creating unique products and cost-effectiveness for consumers is the only way for enterprises to survive.
From shampoo to toothpaste, from mobile phones to cars, from instant noodles to beverages, the development history of these industries clearly tells us: a company that only focuses on channel construction and ignores brand building is doomed to have no future! Learn from history!
Therefore, based on the analysis of channel development trends, brand strategy is the only way for domestic enterprises to become strong!