Marketing promotion: What else did Luckin Coffee do besides spending money to acquire users?

Today is the day when Luckin Coffee’s first 28% off year-end gift package expires. I don’t know how many people exchanged for a cup of Master Coffee, which originally cost 24 yuan and finally got it for 6.72 yuan.

01

Luckin Coffee represents the transition between the first and second half of China's Internet, a typical example of using money to increase user base. The ofo, the yellow bike-sharing company that competes with this approach in the travel sector, is now on the brink of collapse, watching the blue bike-sharing company that is now at its peak. It was also at its peak once, but that was only last year.

Now it is facing refunds from millions of users it has served and criticism from the media. In 2018, when the Internet was hotly discussed entering its second half, Luckin Coffee expanded wildly, opening 2,073 stores in 22 cities in one year, selling 89.68 million cups of coffee, and gaining 12.54 million users. (Data as of December 31, 2018).

However, these data are far from enough in the eyes of CEO Qian Zhiya and CMO Yang Fei, who are good at marketing . Their goal is to open 4,500 stores in 2019, surpassing Starbucks' 3,521 stores in China and exceeding Starbucks' annual sales of about 900 million cups in Greater China. Become the Chinese coffee brand number one in both cup volume and store count.

If we take the words of Luckin Coffee’s CMO Yang Fei, who wrote the best-selling book “Traffic Pool”:

"The company currently has no cash flow problems and can survive for 3-5 years without making a profit."

On December 12, 2018, Luckin Coffee received an additional investment of US$200 million in the second round from a group of investors led by CAR Inc., and its valuation reached US$2.2 billion.

On this side, various media outlets are pessimistic. Some people brought up the news that Yang Fei was jailed for marketing in the past, the story of Shenzhou's helmsman playing with capital operations to make money out of nothing, and even Shenzhou's marketing tactics of cheating its competitors and not being upright, and judged that Luckin Coffee's behavior was the madness of a group of "lunatics" before they went to their demise.

On the other side, Luckin Coffee was captured showing its frequent goodwill towards the Hong Kong Stock Exchange. The idea of ​​raising funds from shareholders in the secondary market was exposed by the media. The valuation was built up with money from the primary market, and the crime of "squeezing leeks and raising money" was then added to the accusation of "squeezing leeks and making money" among tens of millions of shareholders in the secondary market.

At the beginning of the year, this catfish in the coffee industry became the target of public criticism. Will it make the leap to the dragon gate, or will it become a dried fish on the shore as the tide recedes?

02

In the eyes of many people, the "hardcore operation" that a brand does to leave a deep impression on consumers is nothing more than making you see it everywhere and making you want to take advantage of it. The former surrounds your life, and the latter tempts you to open your wallet.

Pinduoduo is the last big brand that has done two things to the extreme. Its “help me cut the price” campaign has penetrated the social network of one billion people and opened the wallets of 300 million people. Now that it has gone public, it has the right to call itself a success. Luckin Coffee seems to be following the same hardcore route. In 2018, it opened stores four times faster than Starbucks. In the busy CBD, there is a Luckin store within a 5-minute walk.

The elevator advertisements it placed on Focus Media are said to have cost 1 billion yuan, and it has been advertised again and again in the WeChat Moments. The white-collar workers in first- and second-tier cities are completely and seamlessly exposed to this seemingly wealthy blue.

What follows is a wave of subsidies from the wealthy . From the free drink, invite one get one free, buy two get one free, the Double Eleven buy five get ten free, to the year-end gift package of 5 tickets at 28% off. Even if you never drink coffee, your colleagues will even help you to place the next order.

With the slogan "Who doesn't love this cup?" and the confident and flamboyant gait of Zhang Zhen and Tang Wei, the warm drink in the hands may not amaze the taste buds. The quality of freshly ground coffee is still much better than the instant coffee that occupies 84% ​​of the coffee market share in China. And this, accompanied by a good service experience, can be obtained by you for only the price of a bottle of functional drink, or even for free.

Luckin Coffee once stated that as of July 2018, it had subsidized users with more than 1 billion yuan. With an average cost of 22 yuan per cup, the current average price is only around 10.21 yuan. Although the beverage industry has always had a gross profit margin of 50% or even higher, most of the profits are used for subsidies, leading to rumors that Luckin Coffee's losses reached 857 million in the first nine months of 2018.

Rapid expansion and generous discounts have resulted in exponential growth in user big data and the number of cups consumed. These hard-core operations are difficult to judge right or wrong in a business world that emphasizes economies of scale and market share.

Only time is the eternal judge of this operation.

If Luckin Coffee's risk control is strong enough, under the trend of tax cuts and fee reductions in 2019 to stimulate consumption, it will be able to quickly capture the new retail consumption data of hundreds of millions of users as the biggest selling point of this Internet company. Moreover, if the weather vane of the primary market has not been completely changed by the hourglass of time, Luckin Coffee still has a great chance to obtain a considerable C round of funding, or even a C round of funding from giant capital. Then surviving 2019 and even going public will be a dream within reach for it.

Pinduoduo, Youxin, Huya, Bilibili and even Meitu, these names that are ringing the bell in the face of losses, aren't they all watching from the shore?

03

If we cannot judge Luckin Coffee’s hardcore operations as right or wrong at the moment when the outcome is uncertain, then is there anything worth applauding in this business story? Those who conquer users by force will eventually lose their hearts if they cannot win their hearts. This is also the reason why many people are not optimistic about Luckin Coffee.

After educating users on the habit of drinking coffee, will they abandon Luckin Coffee, which has reduced subsidies?

The east wind can still be felt, but human hearts are always harder to guess than tangible materials and things that can be deduced. Then there will be some operations, as soft as a willow swaying in the wind, but as gentle and gentle as spring rain, moistening everything silently.

The cultural value that a brand disseminates in marketing is an arrow that pierces the clouds. Only by hitting the user’s bull’s eye can it firmly control their feet.

As Napoleon Hill, author of the classic bestseller Think and Grow Rich, said:

"Desire is the starting point of all achievements. Confidence can make the mind full of power. Driven by strong self-confidence, you can elevate yourself to an infinite peak."

In the eyes of Joe Pritz, the father of American content marketing:

Desire is the most important expression in marketing content communication, and confidence is the most important attitude in the content delivery process.

The longevity of the Coca-Cola brand cannot be overstated without mentioning the marketing content it spreads subtly. It always strongly links the immediate desire and interest in drinking beverages with the unique taste of Coca-Cola, so that once the desire is triggered, people can't help but choose Coca-Cola.

The common language between user interests (attitudes, desires, hobbies, etc.) and brand expertise (product value, taste, experience, etc.) is the space where a company can leverage content marketing.

Looking back, did Luckin Coffee do the right thing when it comes to brand content marketing?

04

Why can a brand that sells coffee say that it has its own reasons?

A brand’s complete content marketing strategy is actually built on three circles: user portrait, brand voice, and marketing goals. Just like the ring-tossing game in the amusement park, you must first look for the brand voice in the user portrait, and then find the marketing goals in the brand voice.

According to the "Post-90s Lifestyle Research Report" released by TolkingData in 2018, "personalization" is the most prominent characteristic of the 230 million post-90s who are gradually becoming the backbone of society. As a generation that has seamlessly connected to the Internet era, they generally grew up in a more affluent environment than their parents, most of them are only children, and have more individualistic consumption needs and habits.

A similar view is expressed in the report “Post-90s Generation Who Are Starting to Influence Society” published by OMD China. “Doing what you want to do” is the self-assertion of most post-90s generation.

Happiness is manifested in the freedom of speech and the freedom of choice.

Data released by the National Bureau of Statistics showed that consumption continued to be the primary driving force for economic growth in 2018.

In the first three quarters of 2018, consumer expenditure contributed 78% to economic growth, an increase of 13.8 percentage points over the same period last year. Chinese consumers' willingness to consume continued to be released.

As the consumption power of the entire nation is unleashed, the rising white-collar workers born in the 1990s are first demonstrating their consumer voice in the culture and entertainment industries, resulting in the cultural propositions of emerging brands, which need to fully respect this group of newcomers.

Young white-collar workers born after 1985 and 1990 who have strong purchasing power and are loyal to themselves are naturally Luckin's target users. When establishing its brand voice at the very beginning, Luckin Coffee focused on "personalization" and "freedom". As a disruptor in the coffee industry, it broke the current industry monopoly and conventions, established a new order, and gave the market more personalized choices. These descriptions can also be applied to the young people who have just entered society with little experience but have a promising future.

Luckin Coffee naturally hired Zhang Zhen and Tang Wei, two young people with both talent and talent. Most importantly, in their own acting career, they used Luckin’s own advertising line to say, “Don’t choose roles for me, I only choose the ones I like.”

Re-watch Luckin Coffee’s TVC——

• Reason is not the only answer
• You have your ideas, I have mine
• Don't let inherent preferences influence your and my preferences
• Don't use the boundaries of ordinary people to restrict our world

In this one minute, a dozen lines of dialogue bring up countless dialogue scenes in life and evoke resonance among young people's personalities.

"Because I have my own reasons" , Luckin Coffee confidently writes the desire for spiritual independence into its brand voice. This is a textbook operation that resonates with the culture and emotions of the main consumers, drawing the second circle to be extremely close to the user portrait.

On January 14, 2019, Luckin Coffee posted a tweet on its official account, promoting its new wave of discounts and responding to comments from the outside world.

Cultivating users and converting consumption are Luckin Coffee’s primary marketing goals, while responding to doubts and attacks is a big test of whether a brand has marketing wisdom.

In addition to saying to the black PR people: "Thank you for your hard work." Luckin’s response was simple:

• please
• Don't refuse to change, don't define me
• Don't chase me, don't persuade me
• Don't deny me, don't try to make me something I'm not.

If the fishing net is aimed at Luckin Coffee, then swim into the trend of values ​​recognized by everyone. The direction of the tide may be the source of catfish's life.

Conclusion

Luckin Coffee has marched into the traditional beverage industry with the flamboyant attitude of an Internet company, and has embarked on a unique growth path, which has also attracted huge doubts.

With strong capital, it has carried out many astonishing hard-core operations, but it has also made successful moves in the soft marketing of the brand, and has even transformed into recognition and love of the brand by some young white-collar workers.

Perhaps as bystanders invited for coffee by capital, we can be more patient with such an industry challenger and give it time and stage.

Let's wait and see.

Source: Jieneng