Chapter 42 Why did Robust suffer setbacks across the board?

In 1989, five people including Yang Jieqiang, Wang Guang, Li Baolei, and Peng Yanfen and I leased the brand of Guangzhou Robust and founded Zhongshan Robust Health Products Co., Ltd. with 950,000 yuan invested by the Xiaolan Town Government of Zhongshan City.Afterwards, we promoted and expanded at all costs, invested more than 300 million yuan in advertising expenses in just a few years, and the company developed rapidly and continued to create miracles. In 1997, it fully acquired Guangzhou Robust and became the real owner of the Robust brand. However, after 1998, the growth of performance has been lingering. Robust's brand power, product power, action power, execution power and even the vitality of the entire enterprise have been in crisis. Except for bottled water, all lines of business have suffered setbacks.In this year, Robust's sales increased by only 33.3%, which was far lower than the 85.3% in 1997. Since then, the annual sales growth rate of competitor Wahaha is more than several times that of Robust. why?After learning from the pain, I think the reason why the gap between Robust and Wahaha is so wide is mainly due to the following four factors:

The first is on the road of enterprise development. The joint venture between Wahaha and Danone was established early. After the joint venture, they have money in their hands, so they can easily expand their business. However, Robust did not embark on this road until last year after many years. The second is in the choice of advertising media. Wahaha chose CCTV to advertise a few years earlier than Robust, and Cantonese generally do not watch CCTV. Although we have invested hundreds of millions of yuan in advertising, we have not realized the power of CCTV advertising and the vastness of the rural market. , when we discovered the mystery, it was too late.If we want to recapture the rural market that has been occupied by Wahaha, the price we pay must be far greater than Wahaha.

The third is the strategy of occupying the market area. Robust focused on the Northeast, North, and East markets, and mistakenly gave up the Guangdong market, which has the best timing, location, and people.Wahaha's sales in the Zhejiang market accounted for more than 10% of its total sales, while Robust's sales in the Guangdong market were only a fraction of Wahaha's sales in the provincial market. The fourth is in the development of new products. What I regret most is the missed opportunity for new products to occupy the market.Wahaha launched Very Coke in 1998, and now Wahaha's Very Coke has become the company's pillar product and the company's main source of profit contribution.At that time, Robust was also preparing to launch a carbonated beverage project, and even the name of the product was already thought up, called "Today's Cola", but unfortunately, Robust finally gave up on it and chose tea beverages.

Regrettably, Robust's tea drinks did not become a hit as expected. The main reasons are: One is that the timing of the choice is too advanced.At that time, tea beverages were still in the enlightenment stage in the Chinese market, and great efforts had to be made to promote them, but the result was half the effort. The second is the restriction of enterprise structure.At that time, Robust's fruit milk and water were in short supply in the market, and we launched tea drinks on this basis.We have always believed that in addition to poor management and diversification, there is another key factor for companies that have closed down or declined: many companies started with a single product, and there is no way to launch new products, such as three companies, giants, and the sun. God wait.Therefore, after Robust made fruit milk the number one in the country, it gradually developed the subsequent ladder products, and products such as water, tea, and jelly emerged one after another.This approach itself is not wrong, the problem is that these products are not made separately, but all people work around these products, so that no one wants to spend effort to promote new products, because the group has sales growth indicators every year , this indicator can be achieved by promoting old products, but not necessarily by promoting new products.For example, if a branch company is assigned a sales task of 10 million yuan, they can easily complete it as long as they focus on water or fruit milk, but if they focus on tea drinks, the sales may be only 3 million yuan Yuan.Fearing that there would be no way out, no one put effort into new products.

The third is the defect of rules and regulations.In the past, the system was not strict, and it was often difficult to distinguish their respective responsibilities. There were also many systems that were in name only, and the implementation was not strong enough, and the enthusiasm and creativity of all employees were not fully mobilized.