A comprehensive analysis of Vatti: A win-win-win situation of “leveraging marketing” during the World Cup!

As early as the early morning of July 11, France defeated Belgium 1:0 in the semi-final and advanced to the World Cup final. Since then, while everyone is paying attention to the French team, most Chinese consumers have also increasingly focused their attention on Vatti because of the promise that "If France wins the championship, Vatti will give a full refund"!

Commitment details:

"For consumers who purchased the "Championship Package" from Vatti between 0:00 on June 1, 2018 and 22:00 on June 30, 2018, Vatti will refund the invoice amount of the purchased "Championship Package" products."

A marketing campaign that is sure to make money, cost analysis

How much have each major brand invested in marketing for this World Cup ?

During the 2018 World Cup, companies from various countries invested a total of US$2.4 billion (approximately RMB 15.4 billion) in advertising expenses. Among the sponsors and partners listed on the official website of the 2018 Russia World Cup , there are seven Chinese sponsors: Wanda , vivo , Mengniu, Hisense, Yadi, Dipai and Zhidian Yijing. They also spent the most on advertising during this World Cup, reaching US$835 million (approximately RMB 5.35 billion).

The sponsorship price of the World Cup official sponsors is approximately above 50 million US dollars, and three Chinese companies are among them: Hisense, vivo, and Mengniu.

According to Liang Zhenpeng, a senior home appliance IT industry analyst, Hisense spent 1 billion yuan on World Cup marketing, which is equivalent to Hisense's net profit of 942 million yuan in 2017.

The third-level regional sponsorship is an innovation of this World Cup. Previously, this level of sponsorship was only open to companies in the host country, but this year it has been increased to five regions around the world. Chinese brands Yadea, Zhidian Yijing and Dipai have become regional sponsors in Asia, with each of the three companies paying US$20 million in sponsorship fees.

This time, Vatti took advantage of the World Cup to increase its marketing costs.

Wang Zhao, securities affairs representative of Vatti Holdings, previously stated that if the French team really wins the championship, the compensation costs will indeed be quite large, but this is within the annual marketing budget and will not have a significant impact on the company's performance. Moreover, the headquarters and dealers bear the marketing expenses together. The headquarters pays for the e-commerce channels , and the dealers pay for the offline channels, which largely shares the marketing costs. And even if compensation is to be paid, the actual amount paid is the cost price.

According to preliminary statistics, during the event, the total retail sales of offline channels is expected to be more than 700 million yuan, an increase of about 20% year-on-year. The total retail sales of online channels are expected to be over 300 million yuan, an increase of more than 30% year-on-year. The headquarters of Vatti Company only needs to bear the refunds through online channels.

Among them, the terminal retail sales of the designated products of "Win the Championship and Get a Full Refund" are expected to be about 29 million yuan. If a refund actually occurs, the cost that the headquarters of Vatti Group needs to bear is only the production cost and part of the promotional expenses of the designated products of "Win the Championship and Get a Full Refund", rather than the terminal retail sales of the designated products of "Win the Championship and Get a Full Refund". This cost will be less than 29 million yuan, accounting for only about 1.8% of Vatti Group's sales expenses of 1.6 billion yuan in 2017.

Eclectic marketing methods

Let’s first look at the marketing activities of other home appliance brands.

Meiling launched the "Belgium wins the championship, M Fresh Free" campaign nationwide on May 30th - all consumers who purchase Meiling M Fresh refrigerators (3 models: 639L, 645L, and 660L) will get 20% off if the Belgian national team advances to the quarterfinals, half price if they advance to the finals, and free of charge if they win the championship. For other models of M Fresh refrigerators, if the Belgian national team wins the championship, they will get a 1,000 yuan cashback.

Interaction between Changhong and Vatti on Weibo

Vanward announced that from June 8 to July 4, it will launch the Argentine national team's "cash back for promotion, 50% discount for Golden Boot, free order for winning the championship" event...

Compared with other brands, the "full refund if you win" offer is undoubtedly more attractive to consumers.

The French team is a potential favorite to win the championship, and the uncertainty of "winning" has greatly stimulated consumers' curiosity and desire to buy. Among the consumers who bought Vatti products during the event, it is possible that some of them are fans of the French team. It is also very likely that a considerable number of consumers bought Vatti products under the stimulation of the event, just like betting on football. The difference is that participating in the event not only does not cause any loss to them, but they may also get a free meal.

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Successfully ignited social media and received praise from People's Daily Online

From establishing the "Most Exciting Alliance" with the French team, to inviting spokesperson Henry to shoot a micro -film , from cooperating with Xin Shixiang on "H5#The Most Exciting Us#", to joining hands with domestic brands Blue V Hisense, Konka, TCL and others to "play football", Vatti has successfully ignited social media through a series of innovative marketing methods, as well as this "France wins the championship, full refund". After France won the championship, the most discussed topics in the circle of friends were "Congratulations to the French team for winning the championship", "Croatia is respectable", "Vatti will give a full refund" and so on.

"Vatti, a third-level sponsor and a kitchen appliance brand, has actually found a point that can leverage social media." This is the evaluation made by a financial commentator in a program on CCTV's Finance Channel.

Why is it said that Vatti’s marketing leveraging the World Cup is a “win-win-win” situation?

For consumers, if France wins the championship, Vatti will fulfill its promise and consumers will receive a full refund; for the French team, consumers who pay attention to every game of the French team in this World Cup may also be converted into fans of the French team or a star on the team, such as Mbappe; for Vatti, first of all, it will promote a significant short-term increase in the sales of Vatti products, and secondly, it will greatly increase the traffic of Vatti's online channels, and of course, more importantly, it will gain great exposure for the brand.

Major General Ding, an economic observer and founder of Ding Technology, once said: In terms of revenue, it is estimated that every 1% increase in brand awareness will cost $20 million in advertising fees, while with the help of sports events, the same amount of money can increase awareness by 10%.

By sponsoring a large-scale sporting event such as the World Cup, brand awareness and influence will increase exponentially, which will be of great benefit to brands that are vigorously expanding into the global market. From a risk perspective, due to reasons such as advertising creativity and product characteristics, the World Cup IP cannot be converted into a direct sales boost, and higher advertising investment will lower profit performance.

By leveraging the marketing momentum of the World Cup, Vatti not only boosted sales and enhanced its brand, but also increased the popularity of French teams and stars in China. So, it can be called a "win-win-win".

Author: Senior Brother , authorized to publish by Qinggua Media .

Source: 51COO (ID: COO-51)