Chapter 60 2. Four "Musketeers"

After He Boquan left Robust, a reporter asked Zong Qinghou, who would be Wahaha's future competitors? Zong Qinghou said frankly that today, we have only four competitors in the beverage market: Coca-Cola, Pepsi, Uni-President and Master Kong. A very striking fact is that in the past ten years, food companies from Taiwan have achieved great success in the mainland market. Intensive farming has yielded a lot.Among them, Ting Hsin Group is the most eye-catching one. Ting Hsin is the first Taiwanese food company to enter the mainland market and is by far the most successful. In 1991, Ting Hsin Group, which started out as a producer of castor oil, opened a factory in Tianjin to produce the first package of instant noodles in mainland China, and specially created a brand "Master Kong" full of northern flavor for this purpose.Soon, this Taiwanese company quickly opened up the market with its unique brand image and advertising strategy, and became popular all over China.Master Kong's market share was as high as 70% at one point, and instant noodles became a fashionable food loved by young and old in large and medium-sized cities.

Instant noodles are commodities with small profits, and the transportation cost is relatively high. They win by relying on large quantities and wide ranges.Dingxin has long had the ambition to dominate the national market.In 1993, when the number of production lines in Tianjin increased to ten, Ting Hsin began to set up factories across regions. It successively set up factories in Guangzhou, Hangzhou, and Chongqing to complete the national layout in the east, south, west, and north.Since then, it has established production bases in six other cities, and eventually became a professional enterprise with the most instant noodle production lines and the largest sales volume in the world.Master Kong's production and transportation costs are far lower than those of competitors, and other small and medium-sized enterprises have been unable to compete with it.

Ting Hsin has established a huge business distribution network across the country, with a total of more than 280 "bases", serving 4,500 dealers, providing 80% of the turnover, and it is said that the sales staff exceeds 20,000.The company divides terminals into three grades. Hypermarkets are Grade A, which are visited two to three times a week; food retail stores in central blocks are grade B, which are visited once a week or two; small community department stores are Grade C, which are visited once a month.Master Kong’s business personnel visit 550,000 retail stores within a month.In addition to mastering information and monitoring terminals, they also help dealers take orders, remind money, and deliver goods.

After 1996, Dingxin joined the competition in the tea beverage market, and Master Kong green tea, iced black tea, oolong tea, and lemon tea came out one after another. Tea beverages originally originated in the Taiwan market, and Ting Hsin is very familiar with marketing operations, so it quickly grabbed the largest market share.According to a market survey at the end of 2001, among the tea beverage brands that consumers have drunk, Master Kong ranked first with a high proportion of 70%.The two flagship products, iced black tea and iced green tea, respectively invited Ren Xianqi and Su Youpeng as spokespersons, establishing a fashionable and refreshing brand image among young people.

When talking about the core competitiveness of Taiwanese food companies, Teng Hung-nian, vice president of marketing of Ting Hsin Group, summed up two experiences: one is the product research and development capabilities, that is, the basic science of food, especially in raw materials and spices. The second is that they have accumulated considerable marketing experience in Taiwan and have a strong sense of business expansion.Some even attribute the miracle created by Master Kong to the successful operation of the "Taiwan marketing model" in the mainland market. In fact, these conclusions are only half right.Before Tingxin came to the mainland, it was not a very successful company in Taiwan. Its annual turnover was only NT$1 billion (the ratio of NT$ to RMB is 4:1), which is comparable to Uni-President, Weiquan, Heisong and Bomi. than not even on an order of magnitude.However, Ting Hsin's performance in the mainland is not comparable to that of the above companies.The key lies in that, on the one hand, it has practiced the fast-changing Taiwan marketing experience, and on the other hand, it shifted its market focus to small and medium-sized towns very early on, and spent a lot of money on the construction of its marketing network. time, and demonstrates great flexibility.Teng Hongnian once said that there is a big difference between the mainland market and Taiwan. In Taiwan, the contract relationship between manufacturers and distributors is very clear, and there are few breaches of contract. In mainland China, it is difficult to have credit guarantees. Therefore, Had to "pay first and then pick up the goods".Around 1992, Master Kong put its goods into professional food markets in small and medium-sized towns, and dealt with self-employed food distributors in various places.By 1996, it took the lead in trying terminal marketing, and began to contact the terminal directly without dealers.

At present, Master Kong's huge commercial distribution network and the huge amount of promotional items invested to support the terminal - including storefront signs, freezers, refrigerators, advertising umbrellas, etc., constitute a daunting competition platform. When we were researching in Hunan, a marketing director of Dingxin pointed to a freezer provided by Master Kong Ice Tea in the hotel and asked us: "Do you know why Dingxin put a freezer here?" He replied, and he went on talking: "Promotion and advertising are the first level of meaning, but more importantly, they are for the needs of competition. If a competitor wants to enter this hotel to compete with Master Kong, it will also It has to be in this freezer.

Master Kong's freezers are generated from profits, while competitors invest in advance. In this way, the cost of competition will be greatly increased.Besides, we have put the freezer in the most conspicuous place, and it still has a lot of effort to get in. " Obviously, Ting Hsin is building its marketing "foundation" with great fanfare in the vast Chinese mainland market.This is a project that needs money, time and wisdom to complete, and it will not be an easy task for any latecomer to attempt to subvert it.It is worth noting that a huge marketing team is one of the secrets of Dingxin's success, but at the same time, its huge cost investment also implies unpredictable risks. Around 1996, Master Kong's instant noodle sales peaked.The decision-makers of Ting Hsin are so ambitious that they set up branch factories all over the mainland. At one point, they even proposed to build a production base every 500 kilometers.However, people’s wishes failed. In the second half of 1997, the financial crisis in Southeast Asia broke out, and domestic consumption showed a downward trend. Tingxin, which was moving forward with debt, suffered a terrible cash flow crisis. In the end, it had to sell a certain amount of equity to Japan’s Sanyo Foods to survive. Get over it.We also saw in various markets that Master Kong’s marketing structure is very similar to that of Coca-Cola, both of which are directly controlled by the company’s personnel. The distribution system is very complicated and the cost is often high.

Compared with the young Ting Hsin, Gao Qingyuan's Uni-President Group is Taiwan's "food giant".However, this big brother will call Ting Hsin "Master" in the mainland market. Uni-President Group was founded by Gao Qingyuan in 1967. For more than 30 years, Uni-President has maintained rapid growth every year and has become the largest comprehensive food company in Taiwan.Uni-President adopts a strategy of "scale operation and the advancement of the whole industry". It produces more than 500 kinds of food. Some people jokingly say, "Unification does everything except coffins."

Gao Qingyuan is very similar to Zong Qinghou in terms of market development, and also pursues "follow-up doctrine".That is to say, as soon as Uni-President sees which product is selling well in the market, it will immediately mass-produce it, and quickly defeat its opponents with its scale and price advantages, and grab the "market first" position.For example, Uni-President is the undisputed king of beverages in Taiwan, but apart from Maixiang black tea, there is no beverage that Uni-President developed first. HD Wish is also a practitioner of marketing supremacy.He once said frankly, "Whoever can sell will succeed in his business. Technology is everywhere, and you can buy it with money. I can do it, you can do it, everyone can do it, the problem is how to sell it." The integration of marketing channels has its own unique experience.After the development of the upstream food manufacturing industry, Gao Qingyuan quickly entered the downstream distribution industry and established a 7-Eleven convenience store. Gao Qingyuan wanted to develop at a speed of opening a new store every 2-3 days. By 2002, the entire Taiwan There are as many as 2,800 7-Eleven convenience stores in China. 7-Eleven is generally located in the business district, and is open 24 hours a day, 365 days a year. It has the geographical advantage of being close to consumers and mainly serves teenagers with increasing spending power.It has mastered the desire for convenience of busy modern people, and has achieved unprecedented success by providing ready-to-eat, drink and use commodities.The combination of this food manufacturing industry and a strong retail sales network can be regarded as a model of the strong interaction between the manufacturing industry and the distribution industry.According to statistics, an average of 1,400 people enter each Uni-President 7-Eleven convenience store every day, and the number of customers entering a Uni-President 7-Eleven convenience store every month exceeds the total population of Taiwan.

In 1988, High Definition was willing to cooperate with French Carrefour, investing 35% and 65% respectively, to introduce the first hypermarket to Taiwan.With painstaking efforts for more than 20 years, Unified has weaved a giant-style network composed of convenience stores, large-scale stores, bakeries, vending machines and other marketing forms in Taiwan, becoming the unrivaled number one overlord in Taiwan's distribution industry .In addition, HD Wish has also reached multiple partnerships with global food giants, including a joint venture with Japan's Kikkoman Corporation, the world's largest soy sauce company, to produce high value-added soy sauce, and joining hands with PepsiCo to expand Taiwan's carbonated beverage market , and also has in-depth cooperation with Nissin Milling, Nissin Oil, Meiji Dairy, etc. in Japan.Gao Qingyuan also sold 30% of Uni-President's equity to General Foods of the United States in order to obtain strong support in product development and corporate stamina.

The success in Taiwan made Gao Qingyuan full of longing for his "mainland business".Uni-President came to the mainland almost at the same time as Ting Hsin. Fifteen days after Master Kong’s instant noodles came out, Uni-President’s instant noodles also rolled off the production line.However, before the mid-1990s, Uni-President had been lingering in several big cities such as Shanghai and Guangzhou, and had never really opened up the mainland market.It has successively opened more than 30 food factories in Beijing, Tianjin, Shanghai and other places, producing a series of products such as instant noodles, beverages, milk powder, flour, meat products, salad oil, sauce products and feed.However, in almost every industry, Uni-President has not formed an absolute market advantage, and Qingyuan, which specializes in strategic layout and industrial integration, seems to have "lost" in the mainland market.Some people have analyzed that the slump in reunification is because it has been too successful in Taiwan. The "Taiwan experience" and the "unification model" are like a golden barrier blocking the pace of innovation. Too much marketing funds and sales personnel are betting on large and medium-sized cities, watching Tingxin win successively in urban markets that they think have no "value" and spending power. It was not until around 1998 that Uni-President began to shift its marketing focus to towns and cities. At this time, tea beverages began to heat up. Uni-President seized this opportunity and quickly launched a series of tea beverages. In March 2001, Uni-President launched PET (plastic bottle) packed fresh orange multi-juice drink, which rushed to the forefront of the fruit juice market with its unique taste and sophisticated marketing.By the end of the year, in the ninth year since Uni-President entered the mainland market, the company finally achieved profitability.At present, Uni-President occupies more than 30% of the market share of tea beverages and fruit juice beverages in South China and Central China, and it also performs well in the Northeast, North China and East China markets. It is convincing that, once a mature company like Uni-President and a "plan master" like Gao Qingyuan have found the feeling of opening up the mainland market, their subsequent development potential should still be higher than that of Tingxin. As for Coca-Cola and Pepsi, they may be Wahaha's "eternal rivals". Today, the dominance of "Two Le" in the Chinese market is undergoing the most severe test since 1986.On the one hand, affected by consumption trends, the market sales of carbonated beverages are declining at a rate of 5% per year; on the other hand, Wahaha's "Very Coke" has won about 15% of the market share.Therefore, since 2001, while increasing the promotion of carbonated beverages, "Liangle" had to attack the non-carbonated beverage market at the same time. PepsiCo, which has been fighting fiercely with Coca-Cola in the Chinese market for more than ten years, is in a "climbing period" of resource integration. In 2001, Pepsi's global profit margin was as high as 13%. It even successfully acquired "Quaker", one of the world's top ten food groups, at a "sky-high price" of US$14 billion, pointing directly at Coca-Cola's position as the global leader. At present, Pepsi has integrated the "Quaker" series products such as the sports drink "Gatorade" into the "Pepsi" product series, and basically completed the reorganization of the three major brands of Pepsi, Tropicana and Gatorade, and it has just landed PepsiCo is bound to launch a new round of "China offensive" soon. It is particularly worth noting that PepsiCo is also moving faster and faster in the field of non-carbonated beverages. In 2002, Pepsi launched "Pepsi Lime" with lemon flavor in the Chinese market.Its subsidiary "Mirinda" has also successively launched new products with grape and apple flavors.Coupled with its original three-dimensional crispy, Lay's potato chips, and a large number of snacks such as oatmeal and puffed food acquired from the acquisition of Quaker, Pepsi's beverage and food chain is already very amazing. Once the marketing combination is completed, its allure to dealers is almost irresistible. What Pepsi lacks is the overall layout of the marketing network, which is far less refined than Coca-Cola. Except for Shanghai and central China, Pepsi does not have many advantageous areas, and the market below the urban level is quite vulnerable.Another very likely situation is that in the next three years, the sales volume of Very Coke, which focuses on the rural and urban markets, is likely to exceed that of Pepsi. Therefore, for the ambitious PepsiCo Group, the biggest issue in the future is how to transform the existing product chain advantages into real market advantages. Compared with Pepsi-Cola, which has made a lot of mergers and acquisitions and comprehensively promoted its globalization strategy, Coca-Cola, the world's number one brand, seems to have a smaller pace of change, but it appears to be more stable and confident.In the Chinese market, there are various signs that Coca-Cola is working hard to build a serialized "Chinese brand" team. As early as the early 1990s, Coca-Cola tentatively launched "Zimile" and "Xuefeili" sodas with strong localized colors. In 1996, it launched the "Heaven and Earth" fruit juice and mineral water brand developed for the Chinese market for the first time. In August 1997, the fruit-flavored carbonated drink brand "Xingming" was launched. At present, "Xingming" has become the fourth most popular soda in the country. In September 1998, Coca-Cola launched the "Heaven and Earth" tea beverage, and developed three varieties including oolong tea, jasmine tea and lemon tea, and two flavors of low-sugar and sugar-free. In the summer of 2001, Coca-Cola further launched two other tea beverage brands: "Sunshine" tea beverage and "Lanfeng" honey green tea.According to reports, the Chinese company has also set a market target for "Lanfeng" tea to surpass "Master Kong" and "Unity" in three years. In the innovative packaging of products, Coca-Cola is dressing itself more and more "localized".Entering the new millennium, Chinese consumers have discovered that Coca-Cola appearing in front of them has put on a Chinese coat, from the beaming "Big Ah Fu", the twelve zodiac cartoon cans to the Olympic gold cans. In 2001, Coca-Cola was rated as the "Most Localized Multinational Company" by some research institutions. With the frequent launch of sub-brands, it is difficult to generalize whether there are successes or failures.For example, launching three sub-brands in one breath on tea beverages makes people feel that the company is messy in terms of market integration.However, through these measures, Coca-Cola, the global beverage giant, has fully revealed the importance and prudence of the Chinese market.On the one hand, it hopes to expand a new market space through this multi-faceted attack. In addition, it also lays down some foreshadowing for the protracted war in the future.On the other hand, it also has an unobtrusive but more realistic strategic intention, which is to attack opponents through the development of some sub-brands. A case worth studying is the launch of the "Shuisenhuo" brand. At the end of 2001, without any advertising support, Coca-Cola quietly launched "Shuisenhuo" purified water. The ex-factory price was about 10% lower than that of Wahaha purified water, which has always been based on a low-price strategy.It quietly infiltrates the popular sales markets of Wahaha and Nongfu Spring, and it will cause a lot of market commotion wherever it goes.It is understood that Coca-Cola has not added a pure water production line, and "Shuisenhuo" is produced by OEM. Industry insiders analyzed that Coca-Cola's launch of "Shui Mori Live" should be a strategy of "harassment behind enemy lines".It attempts to slow down Wahaha's progress in carbonated drinks through the impact on the pure water market, attack the opponent's core with the flank, and squeeze the opponent with the expansion of the market space. In order to further expand the Chinese market, Coca-Cola plans to invest 150 million US dollars to increase the total number of bottling plants from 28 in 2002 to 34 five years later.That said, it expects to still grow at around 20% a year, and in order to achieve that, the company will have to make a big splash in the non-carbonated beverage market.