Home Categories political economy Very Marketing Wahaha: Practical Lessons from China’s Success

Chapter 21 3. How to make marketing safer?

Since the 1990s, in the Chinese market, the more representative marketing can be roughly divided into five schools: One is the "skill flow" represented by Guangdong enterprises such as Robust and BBK: they are ingenious, flexible, full of vitality, dare to try, pay great attention to the combination of marketing skills, are good at creating market hotspots, follow the trend, and win in sports opportunity. The second is the "cosmic flow" represented by Haier, Changhong and other enterprises: they often have ambitious goals, pay attention to the macro effect of the market, do not care about the gains and losses of a moment and a place, invest boldly, are good at calculating big accounts, and do not stick to small details in marketing, so It is also easy to cause ups and downs in the market.

The third is the so-called "academic flow" represented by well-known multinational brands such as Procter & Gamble and Motorola: they focus on the integration of various marketing elements and means, have medium and long-term market planning, and are more advanced in setting market strategies than domestic enterprises. To be lofty, the stamina of market competition is stronger, and the ambition is also greater. The fourth is the "utility flow" represented by some "high-tech product" companies, Internet companies, pharmaceutical companies, etc.: they are opportunistic elements in marketing, without a definite corporate survival concept and overall and long-term market strategy, marketing model Uncertain, the market strategy adapts to the situation, makes good use of conspiracy, starts from the dark, and strives to hit with one blow, and then retreats completely.

The fifth is the "natural flow" represented by Wahaha, Lenovo, etc.: they pay attention to the construction of the market foundation, use the brand to drive market popularity, use the Internet to promote product sales, build up momentum, and attack others later, with domineering invisibly. These five genres don’t matter whether they are good or bad, and the competition in the arena has always been "the winner is the prince and the loser is the bandit", and success or failure is often instantaneous.And for any enterprise, once it becomes the leading enterprise in the industry, the safety issue of marketing will be placed in a very conspicuous position.

In recent years, all marketers who often walk in the market have discovered that in the vast rural and urban markets, the competition for distributors and terminal points has reached a fever pitch. There is slack.In many towns along the coast, the tally staff of food marketers will visit a retail location in an average of seven days. This has become an indicator number of days. Therefore, Wahaha has always maintained a rabbit-like vigilance towards the market.Zong Qinghou often said: Wahaha must consolidate the existing urban market and customer base. If it is not done well, all the introduction and efforts today may be for the entry of multinational brands tomorrow and paying tuition fees.

Since 1994, Wahaha has become the largest food and beverage company in China. Therefore, Wahaha is often the first choice for newcomers.In recent years, Wahaha has experienced constant turmoil every year. In fact, "the tree wants to be quiet but the wind does not stop." In all business wars, except for Wahaha's launch of "Very Cola" in 1998, which was an active challenge to Coca-Cola, the rest were defensive. As a market-leading enterprise, one of the issues that decision-makers attach great importance to is how to avoid severe market turmoil and excessive competition and maintain market stability. "Market security" has become a "lever" that determines the long-term benefits of an enterprise.In the choice of this strategic approach, there are multiple modes:

The first is the "technology upgrade method" often adopted by multinational brands.They take advantage of their powerful technology development support capabilities to quickly upgrade their technologies when their competitors are about to follow up or just start to follow up, creating new technical concepts and market demands, and then using intellectual property rights to create barriers to follow up.This strategy of "seeking change through progress" ensures that it will always stand at the forefront of industrial progress, use its technological advantages to ensure the safety of the market and obtain excess benefits higher than the average profit of the industry.A large investment in technology development can also form a competitive advantage.Taking Nokia as an example, its annual investment in technology development for the communication industry is US$2 billion, which is only comparable to that of ordinary companies. If it develops the same high-tech technology, the manufacturing cost of other companies will be several times higher than Nokia.

The second is the "gradient price reduction method" often used by domestic brands.As far as today is concerned, the more successful company should be Galanz microwave oven.It relies on super scale to form super low price, and then form the security of operation.Mr. Yu Yaochang, marketing president of Galanz, once described: When the production and sales scale reaches 1.5 million units, the breakeven point will be 800,000 units; when the scale reaches 4 million units, the breakeven point will be 2.5 million units; 8 million units is the breakeven pricing point.Although the marginal benefits continue to decrease with the continuous expansion of scale, however, due to the double decline of manufacturing costs and sales prices, a strong cost barrier has been formed in the market, and its marketing safety factor has undoubtedly increased.It can be observed from this that many domestic enterprises only regard price war as a means of competition tactics, but Galanz regards it as an important part of strategic decision-making, and its marketing concept is undoubtedly superior.

The third is the "channel reorganization method" that Wahaha is currently trying.For beverage and food companies, each of Wahaha's products has no so-called high technology, so it cannot form a technical barrier.It is not Zong Qinghou's wish to form an advantage through a strategic price reduction strategy, so he puts the strategic focus on the reconstruction of the market network. "The safest marketing" is, of course, marketing without competition in a vacuum.And in an atmosphere of extremely fierce competition, how do you avoid risks in your marketing?Many people think that it is to give each dealer in the marketing chain a greater temptation of interests.

This idea is actually flawed.For a mature dealer, what he desires more than excess profits is a long-term and stable cooperative alliance and a source of income.The foundation of marketing security is the order of the market, the orderly interaction of every link in the entire marketing system and the determination of mutual responsibilities, and the initiator and administrator of this order should be the brand manufacturer.In the future market competition, the extensive marketing model is obviously no longer suitable, and every market decision-maker is looking for a more economical, simpler, more efficient and safer new model that suits him.

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