Why have fast-moving consumer goods such as Yuanqi Forest and Zhong Xuegao achieved rapid success?

The general saying is: they adopted the brand launch strategy of "precise positioning + product features + massive online media coverage". However, everyone often overlooks a core element - in the fiercely competitive consumer goods industry, in addition to providing target users with a clear brand definition, clear product selling points, benefits and overwhelming brand communication, it is more important that consumer goods companies must win the channel competition and help products win high-quality distribution quality.

It is gratifying that after nearly 30 years of development, local consumer brands have gradually regained the distribution channels and terminals they once lost through brand operations. Taking Yuanqi Forest, Zhong Xuegao and Cha Pi as examples, we will unravel how new consumer brands can systematically formulate growth strategies .

01 Four growth models for new consumer brands

For consumer products, two key factors must be considered to achieve growth: users and channels.

Many professional managers or marketing experts believe that for a particular product, the target user group is specific. However, in addition to specific target groups, brands also need to acquire more new users to achieve continuous marketing growth. The same is true for channel factors, which require more channel resource coverage to achieve product exposure and sales. As shown in the new consumer brand "user-channel" matrix:

Therefore, consumer brands need to find a growth model and path that suits them from the "user-channel" coordinates. for example:

Under the “new users – new channels” phenomenon, brands need to achieve growth through successful product market development and penetration;

Under the phenomenon of "old users-new channels", brands need to achieve growth through intensive penetration of users;

Under the phenomenon of "old users-old channels", brands need to achieve growth by rapidly expanding the market size;

Under the "new users-old channels" phenomenon, brands need to achieve growth goals by quickly achieving market coverage.

So, how should new consumer brands plan their best growth model and path?

02 Different growth strategies for different stages

For new consumer brands to achieve rapid growth, they need to know which stage they are in. Is it completely from 0-1 or from 1-N. The focus of growth strategy is different at different stages.

1. New users – new channels

This can almost be said to be brand building from 0 to 1, and Zhong Xue Gao is the best example.

Zhong Xue Gao, which symbolizes Chinese ice cream, has transformed the random consumption of ice cream into purposeful consumption by creating a new consumption scenario. Moreover, from e-commerce to CVS in first-tier cities, Zhong Xuegao achieved a rapid fission of users and channels from 0 to 1.

Since the brand was launched, Zhong Xue Gao has been promoting the product through the online Xiaohongshu, stimulating users' interest and attention in the product, guiding users to go to the Tmall store to try buying it, and finally completing bulk purchases online. During this stage, Zhong Xuegao adopted tactics such as "making full use of the fan economy, inviting Zhou Yiwei, Tong Liya, Ao Ziyi and other celebrity spokespersons; launching the most expensive ice cream on the entire network at 66 yuan per piece, triggering heated discussions among target users" to conduct product testing, which was a great success.

Later, in order to acquire more new users, Zhong Xuegao tried to enter more new channels. For example: using offline pop-up stores to expand influence and achieve fission through Xiaohongshu; opening experience stores to improve delivery coverage and frequency, and increase user reach; after the success of Lawson convenience stores, copy and amplify the experience to find new groups and new needs;

2. Old users - new channels

After completing the layout from 0 to 1, brands often need to implement omni-channel marketing around the target user groups, and Yuanqi Forest is a case we can refer to.

Yuanqi Forest, which focuses on 0 sugar and 0 calories, aims at the high-growth dividend of the convenience chain system, locks in the young consumer groups born between 1995 and 2000, and first launched in the mainstream CVS in first-tier cities, and successfully entered the systems of FamilyMart, Lawson, 7-Eleven, Convenience Bee, and Hema.

Then, it sponsored new dramas such as "Life is Like Boiling", "A String of Life", and "Our Song" on Bilibili to open up the two-dimensional market; it carried out daily exposure online on Xiaohongshu, Douyin, Kuaishou, Bilibili, Weibo influencers, etc.; and chose Wei Daxun as the brand spokesperson to output the brand's positive brand concept.

Afterwards, it focused on social e-commerce, implemented omni-channel marketing around user touchpoints, and established competitive barriers. For example: major bloggers on Xiaohongshu, Weibo, etc. have personally tested and recommended it; Fei Qiming’s Weibo post #I want to give you the bottle of burning tea that I kept in the refrigerator in summer# has been read over 10 million times.

After achieving the top three sales of sparkling water in Tmall, JD.com, and Xiaohongshu stores throughout the year, Yuanqi Forest entered traditional supermarkets and local retail stores. Recruit sales representatives in prefecture-level cities to expand dealers; integrate with traditional channel gameplay, such as agency policies, dealer customer relations, prefecture-level city areas, etc.;

3. Old users-old channels

Once a brand has acquired a certain amount of channel resources and users, it needs to consider how to extend its brand, integrate resources and expand its market size by investing in new consumer brands. For enterprises, because it involves brand strategy (brand architecture, brand portfolio management, etc.), this stage is also the longest and most prone to failure.

China Resources C'estbon launched Magic Sports Drink in 2017 and upgraded the product this year in the hope of helping C'estbon gain a larger market share. The key to Magic's success lies in leveraging China Resources C'estbon's channels and user resources to enter sports marketing and quickly build up a market scale.

For example, in terms of channels, Magic relies on Yilibao’s channel resources in the first- and second-tier markets across the country to develop market layout in 18 first- and second-tier cities. The channel system is basically sold by old Yilibao distributors, and the channel policy is mainly based on "Yilibao brings magic" to offset the distributors' display fees.

In terms of users, Magic leveraged C'estbon's sports marketing resources to achieve brand exposure in more than 100 marathon events in China, creating the marketing buzzword "Magic Sports Season" and strongly linking the marathon with the Magic brand. After achieving success, Yibi Magic sponsored a series of sports marketing activities including the Tour de France China, the Beijing-Hangzhou Grand Canal Cycling Super Challenge, and the Asian Champions League quarter-finals and the Subaru China Rally Team.

All of these were done with the help of Yilibao’s resources. It is also in this way that Magic’s sports marketing has been praised by the industry as a “textbook marketing model”.

4. New users-old channels

For companies that rely on channels to achieve success, as the life cycle of existing products evolves, their contribution to the company becomes increasingly lower, and they are forced to implement changes and transformations, and consider creating new brands or repositioning their brands.

Relying on existing channel resources and acquiring new users through new brands may be the best option for companies. Nongfu Spring Tea Pi leverages existing channel resources and systems to enter the campus channel market and quickly achieve market coverage.

When Cha Pi first launched its product through campus channels at the beginning of its launch, it took advantage of the high profits of new products and key customers to help expand the market, stimulating the channel to quickly expand into the market. The reward policy for salesmen who operate Tea Pi has greatly stimulated them to assist dealers in expanding the market. At the same time, we organize promoters to assist distributors in conducting tasting activities around the school, and during the summer vacation, we set up channels such as Internet cafes and convenience stores around the student group.

For student users, in addition to the "unique product name + unique packaging design", Cha Pi is also good at music marketing. We invited Korean idol group BIGBANG to endorse ChaPi, released BIGBANG posters, and launched activities such as "Buy ChaPi and get a BIGBANG poster" and "Open the lid and win a prize - BIGBANG concert ticket".

The marketing activities of Cha Pi received positive feedback from the market and quickly increased in volume, with goods only available upon reservation of a full truckload. Sales are good, with campus channel sales accounting for 70% of total sales.

03 What the 4 growth strategies have in common

The growth strategies of Zhong Xue Gao, Yuanqi Forest, Yibibao Magic, and Cha Pi seem to be different, but they are all constantly adjusting their marketing strategies around the goal of acquiring more users with the assistance of existing channel resources.

• Zhong Xuegao: Use online social media to attract traffic to e-commerce stores - pop-up stores to expand influence; achieve user fission - open experience stores; increase user reach - launch new products to enter first-tier CVS and acquire more users.
• Yuanqi Forest: CVS channel offline layout, acquire the first batch of users - online brand exposure; acquire more users - focus on social e-commerce; build omni-channel around users - enter traditional distribution channels to achieve more user coverage.
• C'estbon Magic: held a new product launch conference, and the first launch on the e-commerce platform received widespread attention - with the help of channel resources; first launched in 18 first- and second-tier cities - grafted with sports marketing resources; penetrated the target users - fully utilized sports marketing and cultivated interaction between users and fans.
• Tea Pi: Leverage existing channel resources to expand campus channels and quickly increase sales - enter special channels; key large account department assists dealers in market expansion - high profits but quick turnover; achieve CVS penetration - stable profit distribution, and achieve full channel coverage of products.

They use these four growth strategies alternately at different stages of growth:

1. Conduct market testing on online e-commerce platforms and enter CVS in first-tier cities after gaining user recognition.
2. Expand new channel resources around users and increase user reach.
3. Leverage existing channel resources to achieve penetration into existing users.
4. Rely on existing channel resources to implement user extension and acquire more users.

After reading these four models, some people may ask, which one is the best growth model for their own business?

I believe that the key for companies to plan the best growth model for new consumer brands is to balance the relationship between user acquisition and channel resources. Only by clarifying the current stage of the company and the resources it has can we rationally plan our best growth strategy.

Author: Brand Consulting

Source: Brand Consulting