Three marketing considerations on Haidilao’s price increase incident!

In the past few days, the public opinion storm caused by the internet celebrity brand Haidilao ’s price increase and apology has not subsided. So far, the Weibo topic #Haidilao prices increased by about 6% after resuming work# has been read 490 million times, and #Haidilao apologizes# has been read as high as 520 million times.

It is undeniable that online public opinion played a big role in fueling Haidilao's rapid reversal. Judging from the results, it brought huge voice and topics to the brand.

Such a "perfect" ending cannot help but make people doubt the purity of Haidilao's purpose in this operation.

So, what marketing insights can we get from this?

The price increase and apology are fake, the marketing behavior is real

It is undeniable that the epidemic has dealt a heavy blow to all industries, especially the catering industry. As for Haidilao, after being closed for two months, it suffered a revenue loss of approximately 5.04 billion yuan. Raising prices at this time is obviously a marketing strategy for Haidilao to recover losses.

But why do I say this is a marketing behavior?

First of all, let’s look at it from a timing perspective. After the epidemic, all industries are ready to revive. However, it is a general consensus that most people have had no income for two months, or their income has been reduced.

This wave of price increases by Haidilao is much larger than the previous ones, and the timing is very sensitive. Any price increase by any brand at this time is bound to cause controversy and discussion. Haidilao’s senior management would not have failed to think about this issue when issuing the price increase notice.

Secondly, judging from the public opinion effect after the price increase information was released, the view that "You have the freedom to raise prices, and I have the freedom not to" is still acceptable to most people.

After all, eating at Haidilao is not a basic need related to the national economy and people's livelihood.

Overall, although Haidilao's price increase caused heated discussions, there was no one-sided opposition on the Internet. The opposition and the understanding factions were evenly matched, so the public opinion environment for Haidilao's price increase was not negative.

But at this time, Haidilao issued an apology letter restoring the original price. The topic not only became a hot search on Weibo, but also won praise from many netizens. In this round of operations, Haidilao is suspected of turning a market sales strategy into a marketing strategy.

Overall, Haidilao’s price increase is mainly a proactive public relations behavior.

Once again, Haidilao can be said to be a master in using "apology letter" marketing. Whether it was the public opinion crisis in 2011 or the health and safety issues in 2017, Haidilao quickly reversed the direction of public opinion with an apology letter.

It seems that every time you can turn crisis public relations into a free self-marketing.

Another point is that every internet celebrity brand has always been a marketing expert . Haidilao is no exception in this regard, so this time, people have to doubt it.

Young people are still sensitive to prices, and consumption upgrading may be a false proposition

Let’s put aside the debate on whether it is a normal business decision or a marketing practice. There is one thing about Haidilao's price increase this time that really surprised me.

That is the rapid backlash of netizens' public opinion after the announcement of a 6% price increase, and even voices saying that "consumers are morally blackmailing merchants' business behavior."

I don’t know if you have noticed that consumers are very sensitive to prices, which is actually inconsistent with our current mainstream perception of consumers.

The mainstream view is that with the upgrading of consumption and the iteration of consumers, a new generation of young people is gradually becoming "professional consumers", shifting from being sensitive to price to being sensitive to quality, having increasingly higher requirements for product quality, and being willing to pay for higher quality products and services.

But judging from the case of Haidilao, consumers are actually sensitive to price, quality and service. From this point of view, the idea of ​​consumption upgrading that current consumers are insensitive to prices may be a false proposition.

Of course, putting aside the impact of the epidemic, consumers actually have a price anchor point for any category of goods.

As far as hotpot is concerned, the per capita consumption of 220+ exceeds this anchor point for most people, because it does not have a very high price anchor point in the minds of most people like Western food.

As far as the Haidilao brand itself is concerned, this price increase may also be a stress test, firepower reconnaissance, and verification of its own market pricing power.

Back to the topic of consumption upgrading, from a higher level, consumption itself has been a process of continuous upgrading since ancient times.

The driving force for the upgrading of consumption behavior can be brought about by the increase in personal disposable income on the one hand and the reduction in the consumption cost of high-quality goods on the other.

To sum it up simply, what consumers care about is "buying better" and "buying better", and the cross-coordination of the two forms a complete consumption closed loop.

As a brand known for its service, Haidilao caters to the current consumption trends of consumers, but judging from the public backlash caused by its price increase.

What consumers are pursuing in the process of consumption upgrading is actually a balance between "buying better" and "buying better", that is, a balance between price and quality and service, which is by no means a logical relationship of one increasing at the expense of the other.

Brands and consumers are getting closer: the two dance and coexist

I guess it sounds a bit magical that Haidilao and Xibei raised their prices and then apologized and lowered them. The brands reduce prices as soon as netizens complain. Are all brands nowadays so pampering to consumers?

In fact, if we carefully observe the marketing trends in recent years, we will find that, at least at the brand marketing level, more and more consumers and users have become the protagonists of brand marketing, stepping to the front and directly participating in brand building.

Recalling Kuaishou’s commercials, NetEase Cloud Music’s marketing operations, and Alipay’s marketing strategies in the past two years, user-driven brand marketing is gradually becoming a marketing strategy that starts from the top-level brand architecture.

It can be said that in the era of social media, the relationship between consumers and brands is getting closer and closer.

Let’s go back to Haidilao’s price increase and then price reduction. From the point of view of “consumers morally blackmailing merchants” mentioned in the previous article, to the online poll launched by Sina Finance and Dianping, “Haidilao has raised its prices, will you still eat there?”, and the final result that Haidilao chose to “compromise”.

Regardless of whether it is a mid-turn marketing behavior, we can see that netizens (consumers) play a key role in this process.

As the well-known marketer Yang Buhuai said, the current irreversible trend is: in the future all brands will have to dance with consumers and build the same brand on the same stage.

Haidilao’s price increase and apology at least make us realize that this trend is not happening in the future, but is already happening now.

Indeed, due to the intervention of mobile Internet, the current relationship between brands and consumers has changed from the previous "double-blind choice" to a dance and symbiotic relationship between the two.

To make an easy-to-understand analogy, the relationship between brands and consumers is, to some extent, similar to the relationship between fans and idols in today's "fan circles".

Fans no longer simply worship idols, but participate in their idols' careers, influencing their activities and access to resources.

To some extent, judging from the Haidilao incident, this is the relationship between brands and consumers, and consumers make quick marketing brand decisions.

Under this trend, brands should actively embrace change and re-examine their consumer communication strategies. Balance the relationship between brands, consumers and brand managers.

Author: Li Dongyang

Source: Chief Marketing Officer