Brand marketing innovation methodology!

If we count the new consumer brands that have become popular recently, such as Heytea, Sandunban, and Nayuki, they have all done a good job of market segmentation and gradually formed their current rapid growth trend. The author of this article has conducted an analysis on this topic and hopes it will be helpful to you

You will find that more and more new consumer brands start from niche markets, marginal groups or a certain circle, and gradually form the rapid and raging trend today.

You will also find that these brands do not have meticulous market research and market segmentation, do not have overwhelming advertising investment, do not have omni-channel distribution, and do not have crazy money-burning subsidies. They may be based on a certain preference, passion, or desire of the entrepreneur, and only provide products and services to a group of like-minded people. Slowly, they appear in front of people in a gorgeous way, and then gradually begin to lead the industry.

For example, Santonban, a boutique coffee that is not restricted by time and space, Lululemon, a brand that loves yoga, underwear that is true to yourself, Allbirds, a renewable and environmentally friendly shoe, innocent juice that benefits all, and so on.

Do they simply rely on segmentation and focus strategies? Excellent product? Word of mouth? Or is there something else?

What innovations are there in their approach to brand building?

How does their focused target demographic differ from traditional market segmentation and positioning?

1. "Market segmentation", "positioning" and new thinking

1. Market Segmentation

"Market segmentation" means that companies divide consumers in the market into several customer groups based on certain standards. Each consumer group constitutes a sub-market. There are obvious differences in demand between different sub-markets. Consumer groups in the same market segment are called target consumer groups.

"Market segmentation" was proposed by American marketing expert Wendell Smith in 1956. It is an innovative development in corporate marketing as the United States shifted from a seller's market to a buyer's market.

In "Marketing Management" by Philip Kotler, the father of marketing, "market segmentation" is used as the basis of marketing. For example, when facing a huge market, first segment it based on geography and demographics, then divide it into smaller parts based on behavioral patterns or interest preferences, and finally determine the target market and design the correct 4P combination (product/price/channel/promotion) to meet the needs of customers in the segmented market.

In short, market segmentation is the premise of target market selection. Its purpose is for enterprises to concentrate resources to provide products or services that better match the needs of a specific target consumer and to develop marketing strategies that are more suitable for consumer attributes in order to gain competitive advantage and win the market.

"Market segmentation" is a simple and easy marketing strategy targeting the current market and existing customers.

2. "Positioning" theory and "differentiation" strategy

The "positioning" theory was proposed by Jack Trout and Al Ries in 1969. It was used in the fields of advertising and communication in the early days, and later extended to brand creation and further expanded to the strategic level.

After many evolutions and developments, the core of "positioning" has always been to start from the minds of consumers and establish consumers' differentiated perception of the brand. In other words, positioning is how to make you stand out in the minds of potential customers.

At the strategic level, the "positioning" theory ushered in the most important methodology - "differentiation" ("The Source of Brands" in 2004) - " Competition between species (categories) drives the increasing division of categories " , and thus proposed this epoch-making concept - "category innovation".

Knowing "market segmentation", understanding the origins of "positioning" and "category innovation", and adding the "differentiation" strategy, can you clearly distinguish the relationship, essence and distinction between the three?

Some people say that the core of market segmentation is differentiation, some people say that the purpose of market segmentation is differentiation; some people say that the purpose of market segmentation is to position consumers by differentiating their needs; others say that market segmentation targets strong demand, while differentiation targets weak demand;……..

In fact, both are right and wrong.

The purpose of "market segmentation" is to find the target market and occupy the operational position based on one's own resources. Then, how to seize the market? At this time, there are many marketing methods to choose from: such as 4P, 4C, UPS (unique selling proposition), blue ocean, etc. Of course, there is also a "differentiation" strategy, the core of which is how to be better than existing products and services.

The purpose of "positioning" is also to find your target market, but it is to find it from the minds of consumers. The method is "differentiation" and "category innovation" . The core is difference and distinction to form differentiation.

Of course, there are also commonalities:

• There are two basic assumptions that are taken for granted: one is that consumers have differentiated and differentiated demands; the other is that a brand or a certain product cannot satisfy all customers at the same time.
• All start from the product. What products/services do you have? You can then segment the population, innovate in categories, or capture their minds.

Taking the mobile phone market as an example, the evolution history of mobile phones is the history of segmentation, differentiation, or differentiation.

• In the early days, the mobile phone market was segmented into high-end, mid-range, and low-end phones based on price.
• Later, in order to seize and expand more markets, Nokia, Motorola, Samsung and others introduced business phones, white-collar phones, and student phones according to social classes, and introduced flip phones, slide phones, etc. according to usage habits.
• Later, new entrants BBK (later vivo) and Xiaomi, one captured the mind with music phones (positioning), and the other differentiated itself with cost-effectiveness (differentiation);
• Nowadays, although the functions are similar, different groups of people have different needs, so mobile phones with various positioning emerge in an endless stream: beauty, photography, selfie, lightness, battery life, geek, etc.

You need to know that whether it is "market segmentation", "positioning", "differentiation", or anything else, they are all methods to seize the market and your cognition. It's just that different strategies are adopted as the market environment changes and your own conditions are limited.

To achieve one of them to the extreme is strategy.

Now, the era of meta-change (change at the root of change) is coming, and the uncertainty of new groups and the future is increasing, which requires newer changes and faster evolution. At this time, we have to think about three questions:

• When startups and brands are faced with a market that does not yet exist, or is changing rapidly and has extremely unstable new consumers, how should they segment?
• When every individual in the new consumer group wants to be unique and stand out in the market segment, how can new consumer brands position themselves and capture minds?
• In particular, every new digital user is passionate, willing to try new things, and actively wants to express something, participate in something, and create something. How can we gain their trust and win their recognition more quickly?

2. Two basic assumptions of the new population: "creating power" and "co-building power"

The new groups mentioned here include but are not limited to "new consumers", "new middle class", "digital natives", "Generation Z", and "post-95s". No matter what they are called, most of them have the following characteristics: having an open mind, being willing to make continuous progress, being tolerant of changes and technology, and accepting the value of destructiveness and uncertainty, even if they are 70-year-old square dancers.

The differences between them and traditional people are not like the age gap and living habits between the post-70s and post-80s, or the post-80s and post-90s in the past, but the differences in thinking logic and cognition of new things, which we can call the "generational gap."

Just like "market segmentation" and "positioning" have two basic assumptions: user needs are different and companies cannot satisfy all users at the same time. This "generational gap" among the new population is also based on two core logics.

First, the core driver of new consumer consumption is “ creating power ”

What is "creating momentum"?

Self-expression is "creation", participation and sharing is "creation", connection and creation is "creation", mixing the virtual and the real is "creation", environmental responsibility is "creation", personalized life is "creation", endless upgrading is "creation", learning and progress is "creation", not following the crowd is "creation", and living out yourself is also "creation"...

• They have created China's national trend and cultural confidence: Li Ning, the Forbidden City, Liziqi... They are also "creating" new expressions of national power.
• They redefined originality. During the Taobao Maker Festival and the campaign of “removing boring products and adding new and younger ones”, there were over 1 billion searches for “original design”, a market size of 10 billion+ original products and stores, and an annual transaction growth rate of 455%+ in the featured market.
• They constantly "create" content, opinions, and attitudes, influencing everyone of this era: Bilibili UP hosts, Xiaohongshu bloggers, Douyin and Kuaishou creators. Among them, there are countless 95 creators, as well as the Bureau Chief born in 1952 and Luo Xiang born in 1977.

Furthermore, their expectations of new brands are also different. They don’t want to “buy” the brand’s products, but to become a part of the brand and have the right to decide what to produce and how to produce it.

Each of them is the creator of their future self and the future world.

Second, great customers are the pace of brand progress and the source of innovation

Let’s take a look at the case of the NIO owner community.

In August 2021, some car owners issued a "Joint Statement of NIO Owners" regarding a certain incident: During the car buying process, NIO did not provide detailed and professional introduction to the driving assistance system.

A few days later, thousands of people joined the "Joint Statement against Car Owners" on online media and the NIO APP, refusing to be represented by the previous statement. Later, the number of people who participated in opposing the joint statement of car owners exceeded 10,000.

Such scenes have appeared many times in NIO. As early as 2019, NIO was in a financial crisis, and car owners from all over the country voluntarily advertised for NIO free of charge; the Macau Car Owners Club raised funds through crowdfunding to build exhibition stands and positioning for NIO; at the Shanghai Auto Show, 200 car owner fans of NIO served as "volunteers" at the NIO booth. Whenever there was a public opinion event about NIO, the "fans" acted as "wild PR", and the outside world said that their brainwashing level was comparable to that of the "fans" in the fan circle.

——“Oppose the joint statement of car owners”, has NIO’s heavy user operation become a sword that hurts itself? 》

There is no need to worry about the possibility that NIO’s community operation has a good foundation but the building is crooked. Let’s just say, who wouldn’t envy a brand that has the support of a community that is willing to express itself, create, and accept change and progress?

These "created" users will do their best to help you succeed, and their wholehearted loyalty to the brand will act like a magnet to attract more people to become part of the brand community.

We can see such cases in Xiaomi, Lego, Fan Deng Reading Club, and Santonban; this logic and method are being observed, borrowed, and practiced by various new DTC brands.

• For innocent juice, there is a blank space of 120 words on each bottle, and the content all comes from users' phone calls and emails.
• Seed Beauty——A beauty brand incubator that believes in “speed is everything”; all brands and products come from user participation. Get feedback anytime and anywhere, including from social platforms, customer websites and your own analysis work; and invite millions of fans to serve as product development experts, enter the laboratory and discuss products with engineers. Laura said that “action and real-time engagement are the core principles of everything.”
• Allbilds (2016) - a pair of extremely environmentally friendly and comfortable shoes. The product is continuously iterated based on user feedback, such as shoe shape adjustment, material optimization, etc. In order to ensure that this iteration is fast enough, the production quantity of each batch is relatively small. This production habit is still used today.

The new logical assumptions redefine the consumption drivers and consumer value of the new group, and also create a new way of building brands - "Don't ask them 'how big is the market segment', but ask 'who are you fighting with'."

3. New crowd segmentation method - from folding to creating

One of the incredible innovations that the Internet has unleashed is the ability to break down boundaries through connections, whether they be geographic demographics, age groups, psychological values, or any other boundaries—thus forming liquid groups.

This liquid group can change its identity at any time and its roles can flow freely according to time, space, preferences, scenes and experiences.

This liquid group expects and is willing to continuously form and create various communities, circles, and tribes.

In this era where circles are easily formed, the basic unit of measurement is no longer the market segment, but the community.

——《Brand Flip》

One of the great creations of digitalization is the ability to provide liquid groups with a fluid digital space, folding together these fragmented groups scattered across time and space, whether it is the offline experience of online forums and WeChat communities, or the online cloudization of offline terminal experience stores and pop-up stores; whether it is the joys and sorrows of day and night, or the experiences of the past, present and future, it not only folds time and space, but also creates new scenes.

There is no doubt that the folded, flowing space, coupled with the liquid group, will bring about new thinking for today's market segmentation or marketing innovation, bolder business structure and business model :

• How to find new groups that determine effective “identity mobility”?
• How to use digitalization to create shorter brand interaction links for new groups?
• How can we continuously create new value for new groups through efficient flow and feedback of information?

Therefore, the new "market/crowd segmentation" and "positioning" methods, or the new brand building methodology, can be to "fold" rather than "segment" the population - temporarily called "creating a new community."

"World Creation": creation, focus, action; rather than segmentation, differentiation and occupation.

The popular version is: start from a very small/marginal group of people, use social tools to gather people from different time and space in the digital space, and through continuously dynamic content, interactions and activities, enable them to participate in brand building, define brand value, convey brand concepts, and grow with the brand.

The high-end version is : join the game with your own dreams and enthusiasm, find a group of like-minded people, and work together to create a community where you can grow together, innovate together, and create brands together.

For new consumer brands and entrepreneurs, this not only means seizing new business opportunities and new consumer groups, breaking the traffic mindset and establishing their own core advantages, but also is a new interface for brand theory and contains a brand building method that is completely different from the past.

This method is not suitable for all brands. It is just one of the brand innovation methods. Of course, it may also be one of the core methods in the future.

4. Tribe’s “New Community”

1. What is a new community?

Humans have been social animals since ancient times, and they have always been pursuing belonging, whether it is a tribe, religion, country, party, society, or Maslow's sense of belonging.

With the doubling of Generation Z and the Z-Effect, "We all want to be unique, but we want to be unique within our own group; we want to stand out, but we also want to be with our community."

As the new liquid integration accelerates, digital efficiency tools begin to penetrate into every aspect of life, diversifying connections, expressions and interactions, improving the accuracy of individual segmentation, and creating new requirements for community design.

Different people look at the community from different perspectives and have different understandings of the community.

The new community that Brand Ape believes in is a concept proposed by Seth Godin, which is more like the English word "Tribe" , which means a group of people who engage in the same activities or have the same behaviors.

A community is formed when people come together around important ideas and gather under the leadership of a single person. ——Seth Godin, Tribe, 2008

“Someone” can, of course, be a brand.

I am an Apple fan. Apple is simple and has a good texture. I am willing to queue up for a day to buy an Apple phone. I am a Weilai car owner. I will actively participate in various activities I like and strive to make our community grow healthily. I love Lego. I am willing to share my works on the "LEGO Ideas" platform and create new Lego together. I believe that "life can be more beautiful". Aranya has been creating new lives and opening up new life states with nearly 100 communities...

The new community (Tribe) refers to a group of people who not only have common interests but also common values, are keen to express themselves, share information, communicate with each other, move around at any time, and identify with the group they belong to.

So, are Zhihu and Douban new communities? Is WeChat group buying a new community? Is Super Member a new community?

2. From the perspective of community tribe, what is not a new community?

Some people think that the early Tieba and Weibo, and the later Douban, Zhihu and Guokr are communities. This is the biggest misunderstanding of the new communities! A new community is not just gathering people with common interests in a virtual space. At most, it is just an interest exchange group. Without an offline community, there are still digital IDs, just like a car without a sense of delivery or ceremony.

Some people believe that the new community is a group of people who gather in an offline space to chat, brag, eat and drink, attend some social activities, and other social activities. For example, car clubs and book clubs, at most they just organize activities for people with common interests; without continuous information exchange, communication and interaction, they are still disconnected individuals.

Some people believe that the new community is the WeChat group. Although the community economy has grown wildly from the WeChat group, the WeChat group is merely a platform and carrier for the new community.

Others believe that new communities are part of private domain traffic, such as Amazon’s membership, Pinduoduo’s group buying, Luckin’s sharing, NetEase Yanxuan’s WeChat community, and group buying in various communities. In fact, at this point, they are just a connection tool, which has nothing to do with brand building, market segmentation, positioning, but is related to traffic, sales, service, and promotion.

These are not communities in the sense of a Tribe, because they have no common ideas, no common actions, and information does not flow between them.

So, what exactly is the new community suitable for the digital age? How to “create” a new community?

Author: Brand Ape

Source: Brand Ape