4 principles of a “next generation” brand

Below, I list some brands that have recently created a “next generation” positioning:

From a differentiation perspective, there are an infinite number of positioning concepts in the minds of customers, and the most popular concepts are “leader” positioning and “expert” positioning.

From a practical perspective, the concept of "new generation" positioning has not received sufficient attention from entrepreneurs. However, today, its strategic value must be given sufficient attention.

Many entrepreneurs introduced us to their products by saying, "Their products are so excellent." But when talking about their competitors' products, they said with disdain, "Those are the products of the previous generation. Ours are the products of the next generation."

Since you define your products as "new generation". So why not spread this highly competitive concept to consumers?

Objectively speaking, compared with other positioning concepts, few domestic companies have defeated their competitors by creating the "new generation" concept, which means that many brand strategy consulting companies do not have sufficient reasons to persuade companies to create a "new generation" positioning. As a result, the “new generation” positioning concept became unsaleable in China.

In fact, once a brand is defined as "new generation" by consumers, business managers should feel honored. Brands occupying this concept are equivalent to owning fashion, high technology and more advanced cognition. The establishment of a “new generation” of awareness enables the brand to enter the “immune” zone and maintain long-term competitiveness.

Video websites are caught in homogeneous competition. For ordinary consumers, few people can use words to describe the differences between the three major brands (iQiyi, Youku, and Tencent)? Watch your favorite shows wherever you can. On May 1, 2020, Bilibili issued the "Houlang" declaration, expressing its solidarity with 130 million "new generations" and becoming a gathering place for young people.

In fact, before this, Bilibili has always been a video website favored by young users.

Technology has led to the emergence of new product categories, and products that are popular today may be outdated tomorrow. Many new products are still in the company's laboratories and do not need to be further developed.

It would be different if the brand had the perception of a “new generation”. The “new generation” has a very strong ability to absorb competition and incorporate new technologies into your products in a timely manner, so that your products do not become “outdated” products and the brand has lasting competitiveness.

Random survey of consumers: Which brand was born earlier, Coca-Cola or Pepsi? There are not many consumers who don’t know that Coca-Cola is the inventor of cola.

Continue asking: When consumers are told that Coca-Cola was born 118 years ago, how many years do you think Pepsi was born?

The answer may be surprising. Because the “new generation” positioning is influencing their judgment. In fact, Pepsi and Coca-Cola are only 12 years apart.

In the minds of Americans, Coca-Cola has always been the representative of the American spirit and controls most of the carbonated beverage market. In people's minds, when talking about cola, it must be Coca-Cola. PepsiCo struggled to survive until World War II and was on the verge of bankruptcy twice.

Starting in 1929, in order to survive, Pepsi reduced its price to half of Coca-Cola, so that Americans knew that the price of Pepsi was half of Coca-Cola, but this did not help Pepsi out of its predicament. Pepsi-Cola is therefore described by Americans as a "drink for the lower class" and is regarded as a drink for black people in the United States.

In order to transform its image, Pepsi launched brand image advertising in the 1950s. In the advertisements, Pepsi invited many celebrities to be product spokespersons. Although sales increased, they finally fell far behind Coca-Cola.

In the 1960s, Pepsi turned its attention to Coca-Cola's "traditional" image and made various efforts to portray Pepsi as a drink for young people. After four years of preparation, the slogan "Pepsi-Cola Next Generation" was officially launched in 1964 and has been used ever since.

This advertising campaign has gained a lot of recognition among young people in the United States, and the product has been favored, especially by young black people in the United States. The concept of "new generation" completely misaligns Pepsi and Coca-Cola in concept. From the category perspective, Coca-Cola belongs to the "cola for rich white people" category, while Pepsi belongs to the "cola for young black people" category.

In 1968, the assassination of Martin Luther King, the famous leader of the American black movement, brought the black movement to a climax. Subsequently, racial riots protesting the assassination of Martin Luther King broke out in 125 cities in the United States, including Baltimore, Chicago, and Washington, D.C., setting off a large-scale anti-violence struggle by black Americans in the last century.

By the 1970s, everything had changed irreversibly.

The status of black people was improved, and a large number of young black Americans took to the streets of cities, opening up American black culture. Hip-hop is the earliest street art originated by black people in the streets of the United States. It was originally a vehicle for black people in the slums of the United States to express their anger and resistance. The essence of hip-hop culture is to express and prove oneself more freely and confidently, representing the personality of young people at the end of the last century.

In just ten years, hip-hop culture has developed from the original four forms of DJing, rap, street dance, and graffiti to performance-oriented sports such as skateboarding and street basketball.

In the 1970s , with the improvement of the status of black people and the popularity of street culture, the status of Pepsi-Cola also rose, and it became a popular black drink on the streets.

At the end of 1983, PepsiCo hired black cultural leader Michael Jackson to shoot two commercials at a cost of $5 million. Pepsi-Cola and Jackson complemented each other perfectly. This popular rock star won the fanatical hearts of the younger generation for Pepsi, and Pepsi's sales soared just one month after the advertisement was aired. According to PepsiCo's own statistics, approximately 97% of Americans watched the ad during the year it aired, or 12 times per person.

By the early 1990s, the popularity of street culture and basketball further enhanced Pepsi's mental status, resulting in Pepsi becoming equal to Coca-Cola in the U.S. market. In terms of retail sales, Pepsi even surpassed Coca-Cola by $100 million.

In the global market, PepsiCo invites popular stars and athletes from various countries to endorse it, continuing its "new generation" brand positioning. A survey in the 1990s showed that Pepsi ranked 8th among the world's top 10 most influential brands, only second to Coca-Cola. Pepsi was crowned the world's best beverage winner in 1997, with its rival Coca-Cola coming in second.

From the above materials, it can be concluded that PepsiCo went through four stages in creating its "new generation" positioning:

These four stages were crucial for PepsiCo to establish the positioning concept of a “new generation” of cola, especially the rise of black culture in the 1970s and 1980s.

However, many domestic beverage companies have tried to imitate PepsiCo's "new generation" strategy, but they only know one side of the story and there are many flaws in the practice of creating the "new generation" positioning concept.

In the herbal tea market, Wanglaoji has always been a leading brand, accounting for more than 70% of the market share. Heqizheng once tried to become the leading brand of herbal tea by creating a "new generation" to stand in opposition to Wanglaoji. It ended in failure.

Energy drink brand "Baofali" is making various efforts to create a "new generation" concept. In 2019, Panpan Group launched a new brand: Leopard Force, and spent a lot of money to sponsor the Chinese Basketball League. From a cognitive perspective, Leopard Power has no chance of creating a “new generation” of energy drinks in the mind.

The formulation of strategies must be adapted to local conditions because cognition and timing are different. Simply copying the "new generation" concept will certainly not produce any results. Before that, the company should first understand the historical origins of Pepsi's "new generation" positioning, from which it can perceive some principles for creating a "new generation" positioning.

It is precisely because Chinese companies have made many fundamental mistakes in creating "new generation" brands that this new concept has not exerted its due power.

Next, we will reveal how companies can create a “new generation” brand and make this concept closely related to consumers, gradually replacing the leaders, or forming a strong “binary structure” with the leading brands.

Once it is an objective fact that a competitor has a long history, we can naturally position it as an outdated, traditional, old-generation brand. The “new generation” positioning concept is essentially an opposing strategy, new generation versus old generation.

If there is no traditional brand for consumers to refer to, the establishment of "new generation" cognition will lack reference and will require a long period of time.

The reason why Pepsi can become the "new generation" cola is that Coca-Cola continues to strengthen itself as a classic, traditional cola. Coca-Cola cannot avoid the fact that it is the inventor of cola, and Pepsi follows suit by defining "classic" as "traditional and outdated."

Positioning theory talks about a case: Advil painkiller. He made an ad listing painkillers through the ages:

Advil doesn't waste time on painkillers. If you conduct market research on ibuprofen, you'll probably quickly discover that consumers know little about it other than that it's an "advanced pain reliever." Potential customers prefer ibuprofen simply because it is positioned as the next generation of pain relievers, not because they understand the product.

ORA is a new force in China's automobile industry. The new brand has become its advantage. Brands with a long history cannot avoid their "long history", and their advantages are being exploited by new brands.

Let’s take a look at Ora’s competitors: Chery, BYD, Changan Benben, and Geely Panda.

Founded in 2018, Euler became the “youngest” one.

Although the long-established automobile products have undergone many generations, their quality remains stable. But from a cognitive perspective, their advantages will become a burden, as they represent the products of the previous generation and are outdated products.

ORA is the youngest one and is a “new generation” electric car. Of course, the stylish and cool appearance of the Ora R1 has a good foundation, giving Ora some time to implant the positioning concept into people's minds. In time, ORA will inevitably become a force that cannot be ignored in China's electric car market.

“New Generation” depends largely on “new”. Time happens to be the best measure for consumers to test "new products". Technology and life are progressing, and today's products should be better than previous ones.

When competitors use their long history to position themselves positively, such as Coca-Cola’s “Classic Coke” positioning. On the contrary, the weakness behind its strength can be exploited, and Pepsi's "new generation" cola is born.

Jiang Xiaobai was founded in 2012 and was the youngest liquor brand in China at that time. At that time, Chinese liquor companies were all digging into their own history, but Jiang Xiaobai had just been founded and had no history to speak of.

On the other hand, Jiang Xiaobai’s advantage lies in its “newness”, and creating a “new generation” positioning just turns disadvantages into advantages. Jiang Xiaobai has cleverly implemented the "new generation" positioning. This strategy has made it the preferred brand for young people to buy liquor. Recently, Jiang Xiaobai's "peach flavor" liquor is an attempt at category innovation targeting young consumer groups.

This is how business works. It needs new things to inject vitality. Once traditional brands occupy the market for a long time, consumers will actively call for the emergence of new products.

This power comes from the driving force of the mind, and companies should follow the trend.

But the human mind is very stubborn and they are unwilling to change because change means uncertainty and risk. When faced with the choice of changing or not changing, people tend to choose not to change.

Intel has encountered such troubles before. The story happened in 1986, when the "new generation" chip 386 came out and was priced comparable to the 286. However, PC manufacturers at the time were reluctant to use this CPU to update their products. So Intel launched the most famous "Red X" advertisement in IT history. It put a big red cross on the three numbers 286 and attached the slogan "Now you can get the performance of a 386 system at the price of a 286 system" under the three numbers 386.

This advertisement increased consumers' interest in the 386, which led to its hot sales.

When faced with new products, people worry that new features will bring new problems and make them unfamiliar with usage.

Traditional brands represent the choice of a large number of people. There will always be some consumers who want something new and want to try new things. This motivation comes from two psychological principles: group safety and the expression of unique self.

Consumers are attracted by the concept of "new generation". When consumers learn more about products or services, companies should provide effective credentials for the concept of "new generation" and tell them what the difference is between the "new generation" and the previous generation?

This is obviously the answer that consumers want to know.

Especially in the early stages of creating a “new generation” positioning, it is crucial to articulate what is “new”. Conversely, once consumers reach a general consensus on the brand’s “new generation” positioning, there is no need for the company to continue to emphasize what is new.

For consumers, it is very tempting if companies can clearly define where products are updated, which greatly shortens the cycle for brands to create a "new generation" positioning.

In the tea beverage market, Master Kong and Uni-President are the two leading brands. Their advantage is that they are the earliest brands selling tea beverages in China. In recent years, Master Kong and Uni-President have tried their best to change their packaging to make their brands more fashionable and appealing to the new generation. It’s too difficult because these two brands have a strong perception of being “old and traditional”. They were launched in 1998, when many consumers were not yet born.

This creates an opportunity for the "new generation" of tea drinks. In 2017, Xiangpiaopiao's brand "Meco" was born, positioned as a "new generation" of tea beverage. In terms of cognition, the "new generation" and the "traditional generation" are in opposition. In addition, the differences in products will also accelerate the establishment of Meco's "new generation" positioning.

Let’s take a look at the differences in the products:

Judging from the market performance, this product has indeed made Xiangpiaopiao Company ecstatic. Within less than 20 months of its launch, sales exceeded 1 billion and maintained rapid growth.

The difference between PepsiCo's new generation of cola is that it serves young consumers, tastes sweeter and is slightly cheaper.

The difference of ORA's new generation of electric cars is that they are small and exquisite with a trendy and cute appearance.

Conversely, if the “new generation” product is not significantly different from the previous generation, consumers may return to their previous habits and continue to prefer buying the previous generation of products. Otherwise, the “new generation” products will not pose any threat to the “old generation” products.

“New generation” energy drinks: What’s the “new” about Leopard’s efforts? Without a clear answer to this question, consumers are clearly not accepting this “new generation” of energy drinks.

Qi'anxin is one of China's leading cybersecurity brands. The company has suffered huge losses for three consecutive years, and the losses are getting worse year by year. It is not having a good time. In 2019, Qi'anxin created the "new generation" positioning concept, which was obviously a wise move. An even wiser approach is to use plain language to tell customers what is "new" about the "new generation" of network security? Qi'anxin will only be very valuable if it disseminates its "threat perception system" technology in conjunction with the "new generation" positioning concept.

Another situation is that companies realize the importance of telling consumers what is “new”, but their appeal is too professional, making it difficult for consumers to understand the value of the product.

In the ceramic tile market, brands such as Dongpeng, Mona Lisa, Marco Polo and Nobel have dominated for many years. The products are stale and the market lacks vitality. Consumers are calling for a "new generation" of products.

For Dongpeng, Mona Lisa, Marco Polo and Nobel, if they want to leapfrog their competitors, they must position themselves as "new generation" products rather than better products. Whichever brand is the first to launch the "new generation" of tiles will have the opportunity to become the new leader in the tile market.

In 2016, Nobel broke the deadlock and launched a "new generation" of tiles, named "porcelain polished tiles".

Nobel did this, and they must have realized the importance of explaining to consumers what makes the "new generation" tiles different. Through various efforts, Nobel hopes that consumers can feel what is new about the “new generation” of tiles.

It is very regrettable that Nobel was careless when defining the "new generation" of tiles. Using "newer technology, better tiles" to define the "new generation" of tiles is too vague, lacks substantive content, and is not powerful enough. Consumers cannot feel the value and benefits brought by the "new generation" of tiles, resulting in consumers believing that the new generation of tiles is in name only.

Nobel then further elaborated on "better technology" through video advertisements, and refined four core technologies: porcelain decorative surface material technology, digital inkjet penetration technology, multi-dimensional full-body fabric technology, and micron-level surface treatment technology.

How many consumers can remember and understand Nobel's four major technologies? How many consumers know what value these four technologies bring to tiles or what problems they solve? These terms are easy to understand for technical personnel in an enterprise. To consumers, these jargons can be confusing.

When defining the concept of "new generation", companies may wish to use the most common language to explain to consumers the value of the new generation of products. Companies should stand in the consumer's perspective, free themselves from professional terms, and look at the new generation of products in this way.

Creating a “new generation” concept is not enough to simply show consumers that the brand is “young”; companies must also explain clearly to consumers what is “new” about the product.

Although some companies have not adopted new brand names. We believe that adopting a new brand name will make the “new generation” more convincing and make the product or concept seem more distinctive.

Going back to the case studies at the beginning of the article, you will find that most of those “new generation” concepts are newly launched brands. Meco is a new brand, Ora is a new brand, and Yuexianhuo is a new brand.

Harvard Business School marketing professors John Gouvier and Elie Ofek, in collaboration with London Business School's Marco Bedini, have come up with best practices for naming next-generation products. Key concepts include:

When naming the next generation of products, companies often take one of two approaches: a sequential naming approach or a complete name change approach.

Experimental studies have shown that each naming method affects customer expectations. By changing the name, the research participants expected a significantly different or new function. With the continuation of the name, they are just expecting improved performance over existing features.

"Consumers don't necessarily read the specs to learn about new features, but they always notice a new name," said Eli Ofek.

In one experiment, 78 participants considered a hypothetical scenario in which a well-known company was preparing to launch a new version of its color printer. Participants were divided into two groups and received a list of seven consecutive model names. For the first group of printers, the entire printer series is labeled in a sequential manner from 2300W to 2900W. For the second set, the first four models are named sequentially - 2300W to 2600W, but the last three reflect the branding change - MagiColor, MagiColor II, and MagiColor III.

Participants rated the likelihood that each subsequent model would be a significant change and improvement based on the name alone (from 1 to 7). Even though participants had no information about the actual features of the product, participants predicted that when the latest version was named MagiColor, it would be a much bigger change than when it was named 2700W.

"With a name change, participants tended to expect significantly different or novel features," said Eli Ofek. "With name continuation, they simply expected improved performance of existing features."

What makes Jiang Xiaobai the choice of the new generation? It is a name that is both personalized and youthful. Let’s make an assumption. If we put an old brand like Niulanshan or Wuliangye on Jiang Xiaobai’s products, how many consumers would think that the bottle of liquor with Niulanshan on it is a new generation of liquor?

When Jiang Xiaobai was very popular, "Red Star" tried to infiltrate the young people's market. They designed passionate advertising images with the theme of "Be famous when you are young" and used young people's vocabulary and tone for advertising. This move failed to achieve their goal: to penetrate the young people market.

As soon as the mind comes into contact with the name "Red Star", a series of cognitive reactions will occur. The core problem is just one: the name is too old.

The human mind has its own computing mechanism. When the information input into the mind is an existing brand name, the mind's first reaction is to judge the product based on existing cognition. New brands obviously have no past perspectives, and everything is based on the product’s current performance (this is when definition is very important).

In order to make the “new generation” positioning concept purer and more novel, the brand name should also be updated.

There are two types of consumer groups. One type is mentally insecure and they believe in tradition; the other type is adventurous, unconventional and they like new things. There is a clear difference between the two in their principles of doing things.

Minds are hard to change, so let those stubborn consumers continue to stick with the brands they use. In this way, the new generation of products will attract a group of young consumers who are willing to take risks, and will be distinguished from the previous generation of products.

If the brand's consumer base tends to be young people, this is a significant differentiation and will greatly promote the establishment of a "new generation" positioning. This is a naturally formed "next generation" strategy with almost no risk.

Before PepsiCo created the "New Generation" concept, there were already significant differences between PepsiCo's consumer groups and Coca-Cola's consumer groups. The wealthy and traditional-minded white people in the United States tend to choose classic Coca-Cola, while the poor and young black people in the United States prefer Pepsi.

Young black people are clearly distinguished from the older generation of white people, which provides a good foundation for PepsiCo to create a "new generation" positioning. A strategy that goes with the flow is a safer bet.

In the tea beverage market, Master Kong has gradually become a "migrant worker beverage". In order to distinguish themselves, the new generation of consumers choose to give up Master Kong Green Tea, which provides conditions for Meco to create a "new generation" of tea beverages.

Heqizheng Herbal Tea once tried to create a "new generation" positioning concept, but most of its consumer groups were consumers of the previous generation, resulting in the failure of creating a "new generation" positioning. The reason is that when Heqizheng was first established, it hired 53-year-old Chen Daoming as the brand spokesperson. Mr. Chen Daoming held a paper fan with traditional Chinese symbols, and the voice-over was "Heqizheng, authentic Chinese herbal tea."

Mr. Chen Daoming has endowed He Qi with a deep-rooted understanding of tradition and classics. Heqi's attempt to change perception and reposition its herbal tea as a "new generation" has failed.

Tik Tok’s “new generation” short video, the choice of young people!

In the technologically advanced Internet market, new products and models are constantly emerging. In order to keep up with the times, the best strategy is to position the brand as the "new generation". Technology will become outdated, products will become outdated, but the "new generation" positioning concept will not. Pepsi has been around for more than 100 years. After Pepsi, many new brands entered the cola market to compete. But the "new generation" concept keeps the Pepsi brand young.

Compared with its competitor Kuaishou, Douyin has already shown clear differentiation in its target audience.

A survey shows that the highest proportion of Douyin users are between 25 and 30 years old, reaching 29.13%. Users under the age of 30 account for 54.79%. This group is relatively young and is quick to accept new things and keep up with trends. Users aged 41 and above only account for 5.8%. In terms of region, coastal areas and first- and second-tier cities account for a large proportion of the distribution, and these users have high cultural level and consumption capacity.

This is shown in a report provided by third-party data agency Analysys. Kuaishou’s main users have low incomes, young ages, and low education levels. Judging from the content, they are young people in third- and fourth-tier cities and rural users. Kuaishou's user base has a slower pace of life and lacks a rich and colorful entertainment life. At the same time, they have low social attention, cannot become Internet celebrities by their dressing style, do not have the advantage of being high-end, and are somewhat out of touch with the mainstream Internet world. Therefore, Kuaishou is often associated with keywords such as "vulgar" and "earthy" in mainstream media reports.

Judging from the characteristics of the existing population, Tik Tok already has the foundation to create a “new generation” positioning. On the Internet, there are 6,120,000 messages describing TikTok as "new generation". Since consumers believe that TikTok is a “new generation” of short videos, the best strategy for companies is to conform to this perception and immediately label themselves as a “new generation”. Doing so can effectively prevent later comers from defining TikTok as "old generation".

The speed at which the new generation of groups is splitting apart is astonishing. Once a brand has gained a group of loyal young people, the fission process will begin. Many clothing products that young people like are spread rapidly through such fission, which is also the reason why Douyin quickly surpassed Kuaishou.

If the "new generation" products choose a consumer group that believes in tradition and is too conservative, it will obviously be detrimental to the development of the market. Companies should find suitable users for new products. Young people have obvious advantages in accepting new things.

Author: Zhu Xiaoshuan

Source: Zhu Xiaoshuan