Brand war under the epidemic

We all know that the former chairman of Coca-Cola once said, "If my factory is destroyed by fire, if I encounter a global financial crisis, as long as I have the Coca-Cola brand, I will stand up again the next day." This sentence has long been regarded as the best interpretation of brand power, and the so-called brand power can also be seen as the ability to deal with uncertain risks such as "black swans".

And now, that fire has really come, which is today's new coronavirus epidemic, and it is time to test the brand's power.

1

The so-called brand actually refers to the user's perception of a company, and behind the so-called perception is the trust link between the user and the company. Users believe that you can provide cost-effectiveness, believe that you can provide good services, believe that you can bring aesthetics to life... In short, users believe what they believe.

According to the well-known Maslow's hierarchy of needs, human needs are divided into five progressive levels: physiological needs, safety needs, social needs, respect needs, and self-actualization needs. The pyramid framework proposed by Maslow in 1943 is very versatile, so it has been cited continuously for a long time.

The development of brands mostly follows these five levels. First, brands that meet physiological needs are born (in fact, the physiological needs level does not need brands because there is no premium), then brands that meet safety needs are born (the brand premium part is the satisfaction of safety needs), and so on, finally satisfying the user's self-satisfaction needs.

In an ideal environment, a brand's products must first meet functional needs, then make users feel at ease using them, then be able to integrate into social circles, then create a sense of superiority in social interactions, and finally help users achieve self-actualization.

This is also why brands with consumption upgrades will sell for more and more expensive, because the brand premium will become larger and larger. If there is a brand that can satisfy the "need for self-actualization", its product price will be:

Product price = cost + physiological needs premium (necessary profit) + safety needs premium + social needs premium + respect needs premium + self-satisfaction needs premium

Of course, the above is just an imprecise principle model, but it can better express the composition of the brand from the demand perspective. Maslow's pyramid of needs not only expresses the progressive path of human needs, but also draws an overall framework for industry and consumption upgrades.

2

Now let’s get back to the coronavirus pandemic.

The epidemic is actually an overall reduction in public demand. Due to the general panic among the public about the epidemic, the epidemic has brought all users' demand for brands back to the level of "safety needs".

One thing that needs to be noted here is that the distribution of the number of brands is not in the form of Maslow's pyramid of needs. In other words, it is not the case that the more brands meet the need for "self-actualization", the fewer brands there are. On the contrary, there may be more such brands, because the higher the level of needs, the more personalized, and the more vertical the field, the more brands can be accommodated. The more a brand meets the basic needs, the more popular and standardized it becomes, and its number will decrease due to continuous integration and economies of scale.

Therefore, judging from the distribution of brand quantity, there may be an "inverted pyramid" distribution that is completely opposite to the demand pyramid.

Under the impact of the epidemic, it is the mass brands with strong brand power that can gain the choice and trust of the public. An obvious example is that when ordering takeout during the epidemic, most users prefer to order from branded businesses such as McDonald's and KFC, and have more safety concerns about unknown roadside shops.

This is the "risk resistance" benefit brought about by long-term brand investment by McDonald's and KFC. Behind the brand, there is actually a complete set of standardized hygiene processes to support it, which makes the public believe that these big brands can better protect health and safety.

This so-called "risk resistance" is relative. It does not mean that big brands will not be negatively affected by the epidemic, but that they can have better performance and confidence in the entire industry. I believe that if you go out for something, you will find that under the influence of the epidemic, some McDonald's and KFC stores have not stopped business.

Let’s take another look at Xibei Youmiancun, which was hotly discussed a while ago. The general content of the incident is that an executive of Xibei revealed in a media interview that Xibei may not last more than three months with its current cash flow. This statement instantly aroused public attention on the downturn in the catering industry.

In fact, I tend to think that the heated discussion about this matter actually reflects the brand power of Xibei. Because if it was not Xibei, but another unknown brand, this incident would probably not have caused such a sensation. You can even understand that the reason for the heated discussion is that Xibei has strong brand power, and this is Xibei's ability to convert brand power into public attention during a special period.

I am personally not very familiar with the overall financial situation of the catering industry, but perhaps the fact that Xibei was revealed to "only last for three months" is not too bad in the catering industry. A large number of small brands may not be able to last for three months. Of course, judging from various social impact indicators such as industry and employment, an enterprise of Xibei's scale is more worthy of public attention.

3

According to "The Black Swan" written by Taleb, most people hate uncertainty because people tend to suffer losses in uncertainty, and the so-called "black swan" events cannot be predicted and will not disappear, and may even happen more and more frequently in the future. Therefore, we should cultivate the ability to "benefit from uncertainty" so that we can embrace uncertainty.

For C-end enterprises, "brand power" may be the ability to resist environmental uncertainty; brand assets are the company's anti-risk assets.

We have said before that in traditional theory, brands can be considered from three dimensions: loyalty, reputation, and popularity.

In fact, in my opinion, these three dimensions are generally in a progressive relationship. Only with user loyalty (repeat purchases) can brand logic/business logic be established and operated; only with reputation (recommendations) can word-of-mouth fission and dissemination be achieved; and then with popularity (attracting new customers), the next round of brand cycle can begin. Even if it is simply and crudely done by spending money on advertising to increase popularity, it still needs to be done on the premise of the accumulation of existing commercial capital.

Brand loyalty, or user stickiness, is actually a kind of cognitive inertia and trust link. Even if a "black swan" event occurs, users are unlikely to quickly adjust their trust in the brand unless the brand encounters a major public relations crisis.

However, one thing that companies need to note is that the establishment of this brand trust needs to be achieved as directly as possible by reaching users, and avoid reaching them through a third party (channel/platform). Otherwise, the user's brand loyalty is based on the channel platform, and the brand is likely to mistake the user's loyalty to the platform for its own brand effect. Of course, the demands of enterprises vary at different stages, and in most cases a lot of costs can be saved through third-party channels/platforms.

When it comes to brand building, the word "cognition" is repeatedly mentioned by the industry. The content and intensity of users' cognition of a company are actually a manifestation of the company's brand power. The current epidemic may also be a brand lesson for companies, which can accelerate the survival of the fittest and brand integration in many industries.

With the arrival of the “black swan”, the competition among companies in terms of brand power has just begun.

Author: Spread Gymnastics

Source: Spread Gymnastics