Three strategies for long-term success of popular brands

After creating a category, you must dominate the category.

Cognitive leadership

Creating a hit product does not mean that it will become a long-lasting hit, so it is necessary to stay ahead in terms of cognition.

Hengshui Laobai Gan is positioned as a liquor that does not make you drunk. Although many liquor brands have the characteristic of not making you drunk, only Hengshui Laobai Gan takes not making you drunk as a strategic goal.

Before Feihe positioned its milk powder as more suitable for Chinese babies, Beingmate had already established relevant laboratories and said "international quality Chinese formula" on the packaging. But Beingmate does not occupy this position in the mind.

FOTILE is positioned as a high-end kitchen appliance that is more suitable for Chinese kitchens, but it does not realize that the characteristic of Chinese kitchens is a lot of oil smoke, and the range hood is the key. ROBAM Electric Appliances has taken a step forward in Fotile's route, focusing on the high suction characteristics of range hoods and creating a new category of high-suction range hoods.

Being ahead in fact does not mean being ahead in cognition, but being ahead in cognition can lead to being ahead in fact. Creating a category is only a factual lead, while dominating a category is a cognitive lead.

An important condition for taking the lead in cognition is to invest money. This is the cognitive distance between domestic brands and international brands.

Domestic brands often think that capital investment is consumption rather than investment. So in this regard, we are often not thorough enough. Clausewitz said that no one takes only half a step across the trench, and two half steps together do not equal one step.

Only by treating capital input as an investment can we get ahead in cognition. Capital investment is part of the brand. What consumers buy is your brand. In other words, what consumers buy is your capital investment.

From a competitive perspective, only sufficient or even excessive capital investment can defeat potential competitors. Procter & Gamble invests more than one billion in advertising in China every year. It uses advertising investment to raise the threshold of competition and increase its popularity in the cognitive end.

Creating a brand depends on public relations, maintaining a brand depends on advertising.

The domestic brands we appreciate more are Nongfu Spring, Xiaoguan Tea and Melatonin. According to the data in the prospectus, Nongfu Spring's advertising and promotion expenses reached 980 million, 1.23 billion, and 1.21 billion respectively for three consecutive years from 2017 to 2019. Annual marketing expenses are as much as a quarter of its profits. We don’t have data for Xiaoguan Tea and Melatonin, but from our intuitive feeling, their advertising investment far exceeds that of similar brands.

The model of long-lasting hits can be viewed in conjunction with the brand positioning clover: the cognitive end must stay ahead, the enterprise end must stick to categories, evolve categories, and differentiate categories, and the competitive end must introduce competition and expand categories.

Stick to the category

Having money is great, but having money without knowledge is a disaster.

If money could create a brand, then all the brands in the world would belong to banks, and Coca-Cola and Procter & Gamble would not have to rely on acquisitions to create brands.

If Nongfu Spring does not stick to the natural water category, and alternately produces purified water and mineral water, the effectiveness of its advertising investment will be greatly reduced, or even zero. Because when you don't stick to the natural water category, you are giving potential competitors the opportunity to enter this category.

Brand competition is actually category competition. The competition between Moutai and Wuliangye is the competition between sauce-flavored liquor and strong-flavored liquor; the competition between iPhone and Nokia is the competition between smart phones and communication phones; the competition between Xiaoxiandun and Yanziwu is the competition between freshly stewed bird's nest and instant bird's nest; the competition between Nongfu Spring and Yilibao is the competition between natural water and purified water; the competition between Lao Xiangji and KFC is the competition between Chinese fast food and Western fast food.

This requires brands to stick to their categories and not expand blindly. After Qia Qia pioneered the fresh nuts category, it expanded into the breakfast oatmeal category, providing potential competitors with an opportunity to enter.

When Wuliangye became popular all over the country, Moutai also followed suit and launched a strong-aroma liquor. After Moutai became the new generation of national liquor brand, Wuliangye also produced sauce-flavored liquor. In essence, they are all damaging to their own brand value.

Since Wuliangye is the representative brand of strong-flavor liquor, the more successful Wuliangye's sauce-flavor liquor is, the less willing consumers will be to choose strong-flavor liquor, and the more willing they will be to choose sauce-flavor liquor. And because Moutai is the representative brand of sauce-flavor liquor, the more successful Wuliangye’s sauce-flavor liquor is, the more beneficial it will be for Moutai.

vice versa.

There are several key points in Mao Zedong Thought: You fight yours, and I fight mine. If you can beat them, fight them. If you can’t, run away. Because if I fight you the way you do, I will definitely not be able to beat you.

Lengshenling toothpaste focuses on preventing tooth allergies, but it wants to attack Colgate's goal of preventing tooth decay. This is fighting in the opponent's way. Oni shampoo focuses on black hair, but it wants to attack the smoothness of Pantene, which is also fighting in the opponent's way. Not to mention that Pawang shampoo makes herbal tea and Evergrande Real Estate makes drinking water.

Evolution Category

No category is perfect, and the responsibility of category leaders is to continuously evolve the category.

After pioneering the high-suction range hood, ROBAM Electric Appliances has continued to evolve its product categories, and by 2020 has launched the fourth-generation high-suction range hood. On the one hand, it is constantly leading the industry upgrade, allowing more peers to enter the category and jointly expand the category. On the other hand, it is raising the entry threshold and strengthening its own brand moat.

After Dong'e Ejiao was repositioned as a national tonic, it launched a large amount of public relations promotion and advertising investment, which was reflected in the continuous price increase of the product, from 90 yuan per catty to more than 2,000 yuan per catty. It attracted companies such as Tongrentang and Hongjitang to enter the donkey-hide gelatin category, and also boosted the prosperity of the entire industry.

Volvo Cars positions itself as a safe car, and it does not stop at the communication level of safety, but rather it continuously invests in the evolution of the safety car category.

After Volvo invented the three-point seat belt in 1959, Volvo invented a seat that combined safety and ergonomics in 1964. In 1967, Volvo invented the world's first rear-facing child safety seat. In 1998, it invented the head and neck safety protection system. In 2002, Volvo developed a dummy simulating a pregnant woman. In 2012, Volvo launched the world's first "pedestrian airbag".

Other car brands use ordinary dummies in their crash tests, but Volvo feels that this is unfair to women, especially pregnant women.

In 1995, Volvo Cars was the first in the industry to use a female dummy for collision testing; in 2000, it was the first in the industry to use a fully realistic dummy worth one million Euros to simulate a pregnant woman for collision testing.

The pregnant dummy not only looks like a pregnant woman in appearance, but its body also realistically simulates various layered structures such as the uterus, amniotic fluid, placenta, and fetus.

Starting from 2020, the maximum speed of Volvo models will be limited to 180KM/H. After analyzing a large amount of data, Volvo found that when humans drive at speeds exceeding 180KM/H, the probability of accidents will increase exponentially.

In the category of safe cars, Volvo's category evolution is a model.

Differentiation categories

Categories will evolve and also differentiate. The differentiated small categories may become large categories in the future.

For example, smartphones evolved from tablet computers and have now overturned tablet computers. With smartphones in hand, consumers will no longer want to buy a tablet computer.

Product categories are bound to differentiate. At the beginning, there were only shoes. After differentiation, running shoes, basketball shoes, football shoes, slippers, high heels, etc. appeared. Nike started out with running shoes, but it grasped the differentiation trend in time and launched basketball shoes, tennis shoes, etc., and even challenged Adidas's stronghold - football equipment.

Categories are bound to differentiate, just as they are bound to evolve. If a brand fails to notice this trend, it will be replaced by new categories. For example, Kodak did not realize that digital cameras would replace film cameras, and when the new product category emerged, Kodak disappeared.

Of course, there are also many times when disruptors come from outside the category. For example, smartphones originated from the computer category, and Toutiao did not evolve from the paper media category, but they have both disrupted many industries. This is the boundary of category theory. Especially in the mobile Internet industry, disruptors rarely come from within the category.

Category leaders should not only be aware of the trend of evolution and differentiation, but also actively promote this trend and create newer and more convenient new products for the business community through continuous technological innovation and knowledge advancement.

Many times, category leaders can evolve categories, but it is difficult for them to differentiate them. For example, Haidilao can continue to evolve in the hot pot category, but it cannot reach differentiated categories such as rotating hot pot, seafood hot pot, beef hot pot, etc. This is also an opportunity for latecomers.

Introducing competition

Competition within a category can expand demand for the category.

Because the competitors of category leaders include brands in other categories in addition to brands in the same category. When it comes to donkey-hide gelatin, potential customers first choose tonic products. Donkey-hide gelatin, cordyceps sinensis, sea cucumber, deer antler, ginseng, etc. are all selected. For leading brand Dong-E E-Jiao, the top priority is to get potential customers to choose E-Jiao rather than other categories.

Competition within a category will make potential customers pay more attention to the category. For example, the competition between Pepsi and Coca-Cola has made more people pay attention to Coke rather than other beverages. The connection between Qinghualang and Moutai has made more people pay attention to sauce-flavored liquor rather than other types of liquor. The competition between Renrenche and Guazi has made more people aware of the used car direct sales network category rather than other categories.

Of course, this competition is based on the monitoring of the leading brand. When the second brand tries to seize the leading position, the leading brand must promptly output hot-selling information and emphasize its leading position to suppress the ambition of the second brand. For example, the competition between Wanglaoji and Jiaduobao.

Even when Wanglaoji was developing at its peak, it did not launch large-bottle packaging. Dongpeng Special Drink has annual sales of 5 billion yuan, and Red Bull has not yet launched a large bottle. Li Ning and Anta have developed well at Nike's lower price range, and Nike has not lowered prices or launched a second brand.

Because Heqi is expanding the herbal tea category, Dongpeng Special Drink is expanding the functional beverage category, Li Ning Anta is expanding the sports equipment category. When potential customers' purchasing power increases, they will choose leading brands.

Expand product categories

Introducing competition is one way to expand a category, and the responsibility of leading brands is to expand the category themselves. Because when a category prospers, the leading brands will benefit the most.

When we were consulting for a dance school in Boston (Bailemos Dance Platform), the founder Pan Hongquan said that Chinese Americans still prefer white teachers because they feel they are more professional. All the teachers here are Chinese.

Our suggestion is to first change the perspective and turn the disadvantages of Chinese teachers into advantages: Who says only white people can dance professionally? Chinese people can also be professional enough. At the same time, we should export the same confident values ​​of ethnic minorities and focus on dance training for the Chinese population.

After gaining a foothold in the Chinese community, the target population was expanded to include ethnic minorities such as Asians and Latinos, and finally the minorities in the white community were also targeted. The minority will eventually become the majority, and this is the idea behind creating a large category.

If limited to the Chinese population, the category share will naturally be limited. We can also understand it as developing from a flanking war to an offensive war, continuously injecting brand potential.

Of course, the flanking war must start in a narrow enough area, and there must be a position narrow enough to defend. We suggest that Bailemos focus on Latin dance training for Chinese teenagers aged 5-14, first win the competition in the focused market, and then gradually expand.

Bailemos founder Pan Hongquan agreed with our suggestion. She graduated from Salem State University in Massachusetts and received a performing arts scholarship from the New England region while in school.

From 2016-18, she was a member of the Massachusetts Institute of Technology (MIT) Ballroom Dance Team, Salem State University Dance Theatre, and Salem State Repertory Theatre. She has played the leading female role in the Broadway dance drama "Cell Block Tango", the original dance dramas "Yi Nationality", "Am I The Only One" and "Need a person to accompany".

Its strength is sufficient to support the early positioning.

In fact, this was also Martin Luther King's strategy. At the beginning, he advocated for the human rights of black people and fought for the rights that black people deserved. Later, he fought for the rights that the lower-class white people deserved and was no longer restricted by his own background. From the perspective of brand positioning, this is also a strategy to expand product categories.

Coca-Cola was originally a medicine for treating headaches, and repositioning it as a refreshing drink was the first step in expanding the category. After the success of this positioning, Coca-Cola repositioned itself as the world's most fashionable beverage and expanded into markets outside the United States.

The same strategy was followed by Wanglaoji, which repositioned itself from a medicinal drink for treating internal heat to a beverage for preventing internal heat. After surpassing Coca-Cola in canned beverages in the Chinese market, it repositioned itself as the number one national beverage. Trying to induce wider consumption attempts.

Any mainstream brand started from the margins. Becoming mainstream is the result of the expansion of the category and a reflection of entrepreneurial spirit.