Case: Shanshan Group’s perspective on the consumer market

In fact, any company’s perspective on the consumer market will be reflected in their market and marketing behaviors. Shanshan Group was formerly known as Ningbo Yonggang Garment Factory. It has developed from a little-known small factory to a well-known large clothing company in the country. Shanshan's experience is unusual. Shanshan's views on the consumer market are different from Shanshan's. The specific approach is particularly worthy of our consideration. After experiencing a period of brilliant development, Shanshan's progress has gradually slowed down. The reason here is also worth pondering.

1. The beginning of Shanshan

During China's reform and opening up in the mid-1980s, a craze for suits suddenly appeared across the country. Some industrial and mining enterprises even adapted their work clothes to suits, so suit factories sprouted everywhere. Yonggang Garment Factory was created under this background. Soon, due to some changes in the international and domestic political climate, the nascent suit craze quickly subsided. At that time, everyone believed that Chinese people’s consumption level was not high, the habit of wearing Chinese tunic suits was difficult to change, and the prospects of the suit market were not good. "Does China's suit market have a future? Should the Yonggang Garment Factory continue to operate?" With this question, Zheng Yonggang, the president of Shanshan Group and the director of the Yonggang Garment Factory at the time, ran from Shenzhen to Harbin and became a Extensive market research. From the survey, we found that in Shanghai, in several major department stores, less than one or two suits are sold every month. It’s really miserable! “Is it normal or abnormal for the suit market to be so sluggish?” Zheng Yonggang was on a business trip. Thinking hard on the train. Suddenly, a young man wearing a light gray suit appeared in front of him. He looked so chic and comfortable in a crisp suit. Zheng Yonggang walked over as if he was possessed and stared at the suit he was wearing. It was indeed extraordinary: the style was new, the technology was new, the fabric was thin and thin, soft and light, and it looked really cool when worn on the body! The young man also felt that he was extraordinary. When asked carefully, the young man admitted that what he bought was an imported used suit. These imported old suits are banned by the country, but they are always banned repeatedly. People always rush to buy and wear them at the risk of contracting the virus. This reflects people's psychology: the pursuit of chic and beautiful. Indeed, a suit is a popular international garment worn by people from many countries. "The key is to have high quality and high brand. As long as it has this word "high", why do we have to worry about people not wearing it?" Zheng Yonggang suddenly became enlightened. "Yes! We make high-end suits and create our own famous brands. Our Yonggang Garment Factory has imported high-end equipment and has processed famous brands such as Apple for foreign businessmen. That is someone else's brand, and foreigners buy the products produced by our factory. The Apple brand is used and sold back to our country to make money for us. Why don't we produce our own brand-name products?" Zheng Yonggang was as excited as a writer catching inspiration. What brand should we create? He thought of the tall fir trees that the former county magistrate had personally planted in the factory, and hoped that the Yonggang factory would be as evergreen as these fir trees. Doesn’t the stalwart, tall and evergreen fir tree represent the elegance and elegance of a suit? Yes, it’s called "Shan Shan"!

Zheng Yonggang returned to the Yonggang Garment Factory and started producing high-quality suits.

High-quality Shanshan brand suits are produced, but in the end they have to be evaluated by the market and tested by the market - whether they are popular with consumers.

In the Shanghai market, Zheng Yonggang invited the bosses of several large department stores to listen to their opinions on suit sales and talked about his plan to create his own famous brand in China. After hearing this, the bosses said happily: "As long as our country produces high-quality suits, we will be happy to sell them for you!" With the support of dealers, Zheng Yonggang became more confident in creating his own famous brand. As soon as Shanshan Suit came out, he borrowed 60,000 yuan and ran an image advertisement of "Shanshan Suit, Don't Be Too Chic" through TV and newspapers in Shanghai, making the Shanshan brand a household name in Shanghai. This move caused a sensation in Shanghai. As a result, rare scenes of queuing up to buy Shanshan's suits gradually appeared in Shanghai. A "Shanshan whirlwind" blew up in Shanghai.

2. Shanshan in Glory

Shanshan’s golden age has arrived. There is an endless stream of customers coming to place orders every day, and there is a long queue of vehicles waiting to pick up the goods.

At this time, calls from superiors and calls from factory employees were "hurry up to expand production scale, organize external processing, and make a lot of money." However, Zheng Yonggang unexpectedly proposed a unique business idea of ??"controlling the scale of production and quickly reducing the sales points in Shihai market". He cut off 10 of the existing 16 sales points in Shanghai. At the same time, he only supplied large and famous stores nationwide, and did not supply to mid-range and lower-end stores, county department stores and self-employed businesses. Even the stores in this city and county Several high-end large stores are no exception. Zheng Yonggang said: "We are not going to expand the external processing business to make a lot of money, but we are going to compress the external processing business and concentrate on improving product quality and creating a famous brand, so as to really make Shanshan's brand famous!" He also emphasized: "Looking at the Chinese and foreign markets, products that win with temporary high quantities will inevitably fall from their peak soon. Although our products are high-end, they are still far behind the Western standards. We just want to take advantage of the opportunity to make big money. This is a small farmer economy. Short-term behavior. What we want is a permanent market. Now the domestic suit market is calling for famous brands, and we must create real famous brands to have long-term vitality and long-term economic benefits." At the same time, Shanshan also proposed famous brands. The business idea of ??entering a famous store. He required supply and marketing personnel to open sales channels by going to large department stores, setting up showrooms, and setting up special counters. They should not go to medium and small department stores, clothing stores, let alone county department stores, especially self-employed businesses. Distribution among traders.

Shanshan also informed all shopping malls that if any quality defects are found in the Shanshan suits sold by Shanshan, they will be immediately returned and replaced with new products that meet the quality standards. They must not cut prices on the spot. This is related to Shanshan's reputation. Any quality problems will be the responsibility of the manufacturer, not the dealer. In this way, dealers are more bold and assured, and the Shanshan brand is unique in the fierce market competition.

After seven years of development, Shanshan Group has achieved remarkable results. By the end of 1996, the group's total assets had reached 1.303 billion yuan, owner's equity was 400 million yuan, sales revenue in 1995 was 850 million yuan, and sales revenue in 1996 was 1.44 billion yuan. Shanshan suits were rated as the first choice domestic products in 1995 by the China Consumers Association; they were rated first in the suit category of the best-selling domestic products "Golden Bridge Award" by the Ministry of Domestic Trade for four consecutive years; Shanshan brand series of clothing were recognized by the Ministry of Domestic Trade. In 1995, it was recognized as a famous brand product by the national clothing market. In December 1995, in the national rankings of "Ideal Brands", "Actually Purchased Brands", and "Preferred Shopping Brands", Shanshan Suiting won the first place in all three categories this year. First place in three items; Shanshan Group Company was rated as the top eight in China's garment industry by the Textile Federation and China Garment Industry Corporation in 1996; Shanshan Co., Ltd. officially issued shares in January 1996 and was traded on the Shanghai Stock Exchange It became the first listed company in China's garment industry, which marked Shanshan's embarkation on the path of capital socialization, thus laying the foundation for Shanshan Group to develop into a modern and international large-scale industrial group.

3. Shanshan’s views and practices on the market

The market is the soil for the survival and development of enterprises and the "frontier" of product competition. How to make enterprise products take the initiative in market competition. Maintaining advantages and achieving sufficiently high market share and coverage are one of the most basic goals of modern corporate marketing.

In terms of market development and operation, Shanshan adheres to the policy of walking on two legs. On the basis of consolidating the domestic market, Shanshan will go abroad and expand into the world. In addition, Shanshan will continue to set up specialty stores in large shopping malls in major cities across the country and open 200 Shanshan specialty chain stores under unified planning, and at the same time gradually. Strengthen the market branch and expand its management functions. Use modern information methods and tools to establish a national market information center and gradually realize computer information networking between branches and the head office, establish a computer information management model and integrate the branches. Developing to Hong Kong, South Korea, Japan, the United States, Canada, New Zealand, Europe and other countries and regions, Shanshan suits have spread all over the world and gained a place in the international market.

As the market gradually matured and stabilized, Shanshan's sales team became increasingly large and its quality improved day by day. Shanshan keenly seized the opportunity and chose the path of establishing a marketing company. Marketing companies are not Shanshan's original creation, but this model is indeed a major change in Shanshan's traditional marketing methods. It ultimately shattered the "one size fits all" model between enterprises and shopping malls and other sales channels in the planned economy era. The final customers of enterprise products are consumers, not sales channels. Sales channels are only an intermediate link in product circulation. If the demand for brands and the craftsmanship, design, and cultural connotations that permeate them only stay between enterprises and merchants, then the market space of enterprises will become very narrow. In this case, Shanshan wisely chose the market company model, using the market "internalization" method to directly integrate the sales links including brand promotion, market management, and information feedback into the corporate organization, and integrate the brand's ability to occupy the market. All investment and profit returns are realized within a company at the same time.

The close integration of advertising and marketing work is a characteristic of Shanshan Marketing. As early as 7 years ago, when people's understanding of advertising was far less than it is today, Shanshan people focused their keen eyes on advertising, the magic weapon for winning. For more than 7 years, Shanshan has always regarded advertising as an important decision-making decision for the company, and carried out advertising in an all-round way with advanced awareness, effective organization, high investment and new methods. Shanshan has its own advertising company, which has high-tech advertising facilities and excellent advertising talents to provide suggestions for enterprises to participate in market competition. 7 years ago, Shanshan boldly entered Shanghai. When the company could not pay wages, the company borrowed 60,000 yuan in debt to advertise and carry out all-round and three-dimensional publicity, making Shanshan Suits an instant hit in Shanghai. This is what Shanshan people are doing. A testament to forward thinking and grandiose audacity when it comes to advertising. Even though Shanshan Suits has been rated as one of the top four brands of suits in China, and the top ten clothing brands have been in short supply in the market, Shanshan still insists on spending tens of millions of yuan on advertising every year, especially in the spring and autumn when suits are in high demand. , This can firmly establish the brand image in the minds of consumers. The tens of millions of yuan in advertising expenses gave Shanshan some room for maneuver in choosing media and methods. Shanshan adopts the advertising strategy of big, broad, new and strange, that is, large scale, wide scope, new content, and strange methods. In terms of form, it has eliminated the product manual-style primary advertising; in terms of content, it has entered a comprehensive creative stage. Closely combine product promotion and corporate image promotion, focus on highlighting the noble and elegant brand temperament, and gradually transform into high-level advertising that reflects the corporate spirit and corporate culture.

4. Shanshan Group introduced IC

From 1989 when Shanshan created a suit brand and followed the famous brand strategy, until 1993, Shanshan Suit’s annual sales reached 2.45 100 million yuan, Shanshan created a famous Chinese suit brand in 5 years, and the company and brand have developed to a relative peak. At the same time, how can enterprises and brands be promoted to a higher level? What model should enterprises develop according to? How can they obtain new impetus, so as to start from this relative peak period again, achieve rapid and stable development, and win the future? Success? Shanshan's decision-makers are looking for such a driving force and breakthrough point, paying attention to the crises and opportunities in competition.

At the same time, market research found that although Shanshan's brand image has been initially established in the national market, it is still not consolidated. Especially in the markets of North China and Northeast China, its influence and expansion power are not strong enough. According to Beijing market research data:

1. More than 40 people know about Shanshan Suit, and most of them get their information from advertising, that is, mass media. This illustrates the effectiveness of Shanshan’s advertising investment in the region, and also shows the insufficiency of personal information transmission.

2. The respondents are still generally vague about other concepts of Shanshan suits, and many people even think that its origin is Shanghai or Taiwan.

3. Little knowledge of Shanshan’s corporate logo and business philosophy.

4. There are less than 5 customers who have purchased or clearly expressed their intention to purchase.

5. Preliminary conclusion: In the current public impression, "Shanshan" is just a brand of suits, not a full group concept. It lacks a distinctive image and taste, so it does not have a strong appeal.

From the perspective of competitive brands, foreign brands such as Pierre Cardin have rich management experience and have taken the lead in both advertising planning and image building in the Chinese market. However, the marketing strategies and methods of some domestic brands in market competition are still at a low level such as price competition.

In addition, judging from the current development situation of the clothing industry, China is the world's largest clothing producer, but its products are always at low prices in the international market. At the same time, countless foreign brands are rushing to carve up the Chinese mainland market, while many domestic clothing companies are faltering and on the verge of bankruptcy. Therefore, Shanshan is on the verge of bankruptcy. Advertising and public relations strategies should highlight the overall image and highlight the company's own cultural heritage, so that the corporate character, brand character and product character can be unified, sublimated and widely known. CI (corporate image) was introduced internally. After careful research and discussion, Shanshan established its own corporate spirit, brand purpose and trademark logo. Shanshan's corporate spirit is: to leap into the sea and challenge the future; to "dedicate love and be chic." "Human World" is the brand purpose; the trademark logo and trademark color were redesigned. Since then, Shanshan has carried out a series of themed activities, such as cultural evening parties, poster promotions, tens of thousands of signatures, etc., all of which have selected environmental protection as the theme. At the same time, in order to To help establish the corporate image, Shanshan redesigned the appearance and internal layout of specialty stores and counters. Nationwide TV, newspaper advertisements, light boxes, neon lights, etc. were replaced with a unified new Shanshan logo and corporate spirit words. . It can be said that Shanshan has invested a lot of energy in establishing its own corporate image.

5. Shanshan’s structural adjustment strategy

Since 1994, Shanshan held its first development meeting. The strategic seminar began, and the development of Shanshan Group entered a new historical stage. It announced the completion of Shanshan's historical mission of creating a famous Chinese suit brand, and also announced the end of Shanshan's history as a single clothing enterprise. It marked Shanshan's entry into At the same time, the company formulated the second five-year plan for the development of Shanshan and the grand blueprint for the development of Shanshan in the 21st century, especially the adjustment of the industrial structure and talent structure across the century. It is a huge project to initially build Shanshan Group into a modern and international large-scale enterprise group at the beginning of the next century, and to enter the ranks of world-famous multinational enterprise groups in the 21st century. To this end, Shanshan has formulated the following structural adjustment strategy.

Based on the garment industry, we will develop high-tech industries and complete major adjustments to the industrial structure. Shanshan believes that throughout the world today, famous multinational groups such as General Motors in the United States, Toyota and Panasonic in Japan, and Germany. Siemens, Mercedes-Benz, etc. all rely on their strong scientific and technological strength to develop high-tech industries and participate in fierce international market competition. Judging from the development trend of the world economy, high-tech industries will be the leading industries in the next century. At present, the political situation with the theme of peace and development provides a good environment for China's economic development. Whoever seizes the opportunity will be able to take the initiative. Therefore, Shanshan Group has firmly seized the current extremely favorable development opportunities and proposed a major decision to adjust the industrial structure. This decision mainly includes the following two aspects.

1. Continue to develop basic industries and strive to create international mid- to high-end clothing brands.

Shanshan suits and a series of clothing and apparel are the foundation of Shanshan’s business. After decades of struggle, Shanshan suits have basically established their status as China’s number one suit brand. Shanshan suits’ next goal It is to become an international mid- to high-end clothing brand and create an international famous brand. At present, the design starting point is in sync with developed countries such as Italy and France. The fine suit production line with an annual output of 100,000 sets has been put into production, and a group of senior technical personnel who originally produced Pierre Cardin suits have been hired for management.

Thinking Questions

1. Is it necessary to borrow money for advertising when the company has not yet opened the market?

2. Use the method of establishing a marketing company by the company itself What are the pros and cons of conducting marketing activities such as marketing and advertising planning in different formats?

3. How to build consumer loyalty to the brand?

4. Is the future of clothing companies bleak? Shanshan Is it necessary to shift to high-tech industries?