Chapter 8 Chapter 07 The "Lipstick Effect" in Crisis
Highlights of this chapter: The "lipstick phenomenon" will inevitably appear in economic depression.Don't simply think that the appearance of the lipstick phenomenon means that high-end brands will definitely decline, and mid- and low-end brands will definitely rise, so everyone cuts corners. The essence of the "lipstick phenomenon" is that when the economy is in recession, consumers will choose products with high cost performance, and the highlight of this chapter is to redefine cost performance.For enterprises, if they want to differentiate, they should not only focus on appearance, performance and price as in the past, but also improve the cost performance of products by grasping the essence of the industry.
The global financial crisis brought about the "lipstick effect". Encountered economic depression, the entire consumption pattern will undergo great changes. Through the analysis of the liquor industry, the occurrence of the "lipstick effect" is confirmed. So this is interesting, why are the low-end wines selling so well? Mastering the essence is the key to rebirth under crisis. How do you become a good entrepreneur?How do you become a good consumer?Be sure to thoroughly understand what the true nature of the industry is. Under the impact of the financial tsunami, a lipstick theory emerged.What is the lipstick theory?As far as women are concerned, you always have to wear makeup, you may not wear powder, because of the financial tsunami, you have lost your job and have no money or your income has decreased, but you still have to wear some lipstick.Even if you can't afford L'Oreal lipstick, you can always afford lipstick from the grocery store next door, so it's called the lipstick theory.In the event of an economic recession, the entire consumption pattern will undergo a major change, which is called lipstick-type consumption.This way of thinking is a bit simple. Let me list a few figures for readers to let you know what lipstick consumption is, and you will know how your consumption will transform under the impact of the financial tsunami in 2009.At the same time, I also want to tell our manufacturing practitioners how to adjust to meet the consumer demand under the impact of the financial tsunami. Affected by factors such as the world economic recession, domestic economic cyclical adjustments, and the deceleration of residents' real income growth, the domestic consumer confidence index in 2008 showed a trend of declining quarter by quarter.Judging from the actual market situation, housing consumption has dropped significantly; consumption of housing-related building materials, home appliances and other products is also much lower than in previous years; sales of so-called luxury goods such as high-end cosmetics, accessories, clothing and automobiles have also declined in many places across the country.However, the results of the "2009 Consumer Confidence and Willingness Survey" published by the China Consumers Association on March 12, 2009 showed that nearly 60% of consumers still have confidence in consumption in the domestic market.According to the analysis, in view of the country's consumption policy of stimulating domestic demand, it is entirely possible for Chinese enterprises to seek development by relying on consumers' willingness to consume.So, when the "lipstick effect" appears, what should Chinese companies do?
Now that we talk about the consumption of lipstick, let's take a look at lipstick. Taking the cosmetics industry as an example, from 2007 to 2008, the sales of the entire cosmetics industry fell by about 5.7%.Among them, L'Oreal's growth rate fell from 8% to 4%; Avon's North American sales fell by 3%; Revlon's net profit fell by 72%, and sales fell by 10%; Johnson & Johnson's sales fell by 5%.It can be seen that since the fourth quarter of 2008, the sales of these internationally renowned brands have experienced a significant decline, although it cannot be said to be a sharp decline, the decline range is 5% to 10%.However, Shanghai Jahwa, a mid- to low-end brand in Shanghai, bucked the trend and rose 13% in the fourth quarter of 2008.This phenomenon that high-end brands fall while low-end brands rise against the market is called the lipstick phenomenon. In addition, there is baijiu. Many people say that our Moutai and Wuliangye are irresistible, because drinking buddies like to drink this kind of liquor, and in the event of a financial tsunami, they will use it to soothe their worries.From the fourth quarter of 2008 to March 31, 2009, the sales of high-end liquor fell by 10%, while the sales of mid- and low-end liquor increased by 5% to 15%. Each region is different, for example, Chongqing is 15%.This phenomenon of high-end wine falling and low-end wine rising is the so-called lipstick phenomenon. But the lipstick phenomenon does not imply that consumers prefer cheap products during economic depression, but that consumers prefer cost-effective products during economic depression.The cost-effectiveness we understood in the past is the cost-effectiveness 1 shown in the formula. Cost performance 1 = (appearance + performance) / price The better the appearance of a product, the higher the performance, or the lower the price, the higher the cost performance.We sometimes even ignore the appearance and only talk about performance.The cost-effectiveness of the new concept should be added to the nature of the industry, like the cost-effectiveness 2 in the formula. Cost performance 2 = (appearance + performance + industry essence) / price In other words, under the same price, appearance and performance, if a product grasps the essence of the industry, the cost performance of the product will be improved.This new concept of the nature of the industry is my original creation, which has not been discussed in the management academic circle in the past.For example, Nike's sports shoes are all produced in China, and one of the foundries is called Yue Yuen Industry.Nike and Yue Yuen's products are sure to have the same appearance and quality, so why would you pay more for Nike's sneakers instead of Yue Yuen's?Because Nike has grasped the essence of the industry, but Yue Yuen has not.In the following chapters, I will explain the concept of the essence of the industry in detail through examples such as Nike. In the past, it was difficult for us to use cost-effectiveness to explain why Italian brand-name products are all produced in China, and their appearance and quality are the same as those of China's own products.We simply attribute this phenomenon to the influence of "brand".In fact, we can use cost-effectiveness 2 to explain, that is, Italian brands have grasped the essence of the industry, but our products have not, so their cost-effectiveness is high. For example, assume appearance = 10, performance = 10, industry essence of domestic brands = 0, and industry essence of Italian brands = 40. Domestic brand cost performance 2=(10+10+0)/price Italian brand cost performance 2=(10+10+40)/price Assuming that the price/performance ratio of domestic brands and Italian brands is both 4, then domestic brands can only be sold for 5 yuan, while the price of Italian brands can be set at 15 yuan. 4=(10+10+0)/5 4=(10+10+40)/15 In the past, we did not understand the huge impact of the nature of the industry on the cost performance. Although OEM can produce products with the same appearance and quality, there is no way to produce the "essence of the industry". Therefore, the price of our products cannot be sold, and we can only sell them for 5 yuan. , and the Italian brand produced in China can be sold for 15 yuan due to the nature of the industry. To give another example, in the first quarter of this year, the sales of the international first-line luxury brands of Guangzhou Friendship Store and La Perle Plaza unexpectedly increased by 20% despite the global market plummeting.However, what is strange is that the sales of second- and third-tier luxury goods at low and medium prices plummeted by 30% to 40%.We have noticed that in the first half of 2009, these first-tier international brands launched a big price reduction campaign in Guangzhou for promotion. Some Chanel products were even sold at a discount of less than 50%, which defeated the second- and third-tier brands.I use the same formula to explain this phenomenon.Cost-effectiveness of domestic second- and third-tier brands2: 4=(10+10+0)/5 Cost-effectiveness of international first-line brands 2: 4=(10+10+40)/15 Originally, domestic brands and international first-line brands had the same price-performance ratio of 4, so the two share the market equally.If the price of an international first-line brand drops by half to 7.5 yuan, then its cost performance becomes 8 yuan. 8=(10+10+40)/7.5 Due to the big price cuts of first-tier brands, the cost performance of first-tier brands has risen from 4 to 8, which is far higher than the cost performance of second- and third-tier brands. Of course, consumers will choose first-tier brands without hesitation, resulting in a reverse sales of first-tier brands. The market rises, while the sales of second- and third-tier domestic brands plummet. During the recession period, the behavior of consumers will tend to focus on the "lipstick effect" of cost-effectiveness. Therefore, for enterprises, if they want to differentiate, they must not only pay attention to cost-effectiveness as in the past1 (that is, to improve the differentiation of appearance or Performance differentiation), but also to sublimate to the stage of cost performance 2, and improve cost performance by grasping the nature of the industry.Let's discuss what is the nature of the industry through liquor. I want to use liquor as an entry point to let our consumers know what they are thinking, and let producers know what to do to meet the needs of consumers.We are basically fooled when we drink liquor. For example, our high-strength liquor claims to have 52% alcohol content. Do you believe it?Nonsense.Our human body can hardly bear 40% alcohol content. If you don’t believe it, you can pour 40% edible alcohol into it and drink it. It’s painful to death.Think about it, when you get an injection, it is so uncomfortable to apply some alcohol to disinfect it. How does it feel when you drink 40% alcohol?In fact, you are not drinking alcohol at all, so what are you drinking? How do we measure alcohol concentration?Readers have learned about density, right?learned.What is the density of water? 1.What is the density of alcohol? 0.8.What does it mean if the wine is made and the measurement shows a density of 0.9?That means 50% alcohol by volume, right?very simple.Our international standard "GB 10345-2007 Liquor Analysis Method" recognizes the use of this density method to measure alcohol content.Therefore, if we use the simplest method to calculate, as long as the density is 0.9, it means that the alcohol concentration is 50%.I tell you, this is misleading.Why do you say that?Take the strong-flavored wine as an example, do you know what you are really drinking?Ethyl acetate, that's what really makes you smell booze.This spice is dissolved in alcohol and you get this spice when you drink it, do you know what the density of this spice is? 0.9.What does this mean?You are overestimating the alcohol content in baijiu. Let's play a number game. Suppose water, alcohol and spices each account for 1/3. We already know that the density of water is 1, the density of alcohol is 0.8, and the density of spices is 0.9. Now let's calculate, these three substances Adding them together and dividing by 3 is 0.9, which is the density of 50-degree liquor.But don't forget, there is this spice, its density is exactly 0.9.So what's the end result?The true alcohol content is only 33%, which you can't tell from the proof.The alcohol in the so-called 52-degree liquor may actually be only 33%, because 1/3 of it is spices.I heard that the alcohol concentration of high-grade wine is absolutely nonsense, because there are many spices dissolved in it, so high-grade wine is particularly mellow. The density of 1/3 spices plus 1/3 alcohol and 1/3 water is 0.9, so the marked alcohol degree is still 50 degrees.On the other hand, the actual alcohol content of the liquors on the market cannot be as high as the standard alcohol content. Of course, in fact, it is impossible to have 1/3 as many spices in liquor.why?This is like the miso soup that everyone drinks when eating Japanese food. This soup is very delicious because it also contains "spices".But the chef didn't put special spices, no five-spice powder, chili powder, nothing. In 1907, there was a Japanese named Ikeda Kikunae, a professor at the University of Tokyo, who was thinking about it when he had nothing to do. Since the chef didn’t put this spice in, the umami taste of miso soup must come from some kind of raw material. ?After much deliberation, he found that kelp was the most suspect, so he boiled the kelp, leaving only the soup, and then steamed the soup completely, leaving a brown crystal.Finally, after continuous separation and purification, it was found that the ingredient inside was monosodium glutamate, which is our "MSG" today.Don't put too much MSG, too much soup will be salty, of course, it can't be too little, too little soup will not have enough umami.Our baijiu is the same as miso soup. The best baijiu made from pure grains does not have special spices.But any good wine must be inseparable from two processes, one is repeated fermentation and multiple wine extractions, and the other is blending.Repeated fermentation can ensure that enough spices are produced, and the proportion of different spices in the wine taken out each time is not the same, so that the appropriate proportion can be adjusted by blending again.So no matter what liquor, the core of the whole product is spices.The older the wine, the more perfect the proportion of spices.The freshly brewed wine is similar to the freshly brewed soup, with 98% of the ingredients in place, and only a little "monosodium glutamate" needs to be added to make it perfect.Just such a little "MSG" makes you not feel how spicy the alcohol is.Therefore, 50-degree liquor tastes very mellow, while the half-water and half-alcohol mixture has only a choking feeling. Since the invention of wine, it has undergone tremendous changes from family courtyards to workshops covering hundreds of miles, and then to industrial production expanding to every corner of the world.The degree of industrialization and scale of Chinese liquor enterprises is getting higher and higher. In 2008, China's liquor production reached 5.693 million tons.In the same year, Moutai also achieved the best results in history, with the output reaching 20,000 tons that year.In the 2008 list of the top 500 global listed companies released by the British "Financial Times" recently, Kweichow Moutai was on the list, ranking 363rd among the world's top 500 companies, and ranked ninth in the global beverage industry. The only company on the list in the industry.However, the alcohol in the process of high-speed industrialization is different from the ancient brewing technology, which contains many unknown secrets.So, what is the story behind the world-renowned Moutai?
Let me give you an example, why do you drink Moutai?Moutai is a sauce-flavored wine.What is sauce-flavored?What is Luzhou-flavored?To put it simply, wine made mainly of wheat is called Maotai-flavored, while others are Luzhou-flavored.Almost only Moutai is the sauce-flavored liquor in China, and most of the others are Luzhou-flavored.How many spices can you guess in Moutai? There are more than 200 kinds, of which there are more than 100 kinds that we still don't know what it is.We also don't know most of the spices in Luzhou Laojiao and Wuliangye.But it is strange that these spices are only available in a certain area. How do you become a good entrepreneur?How can you be a good consumer?You must thoroughly understand what the nature of this industry is.Let me take Moutai as an example. Do you know that Moutai can only be produced in Moutai Town, Kweichow? More than 30 years ago, our Premier Zhou gave Fang Yi, then Vice Premier of the State Council, a task to copy Moutai.It is said that at that time, Vice Premier Fang Yi brought a group of people to take away all the processes and equipment of Moutai, and even the master craftsman who made the wine. Rich microorganisms are necessary for making Moutai), searched around, found 50 places, and finally found a place in Zunyi with beautiful mountains and clear waters and no industrial pollution, unfolded all the processes of Moutai, and used local Very pure water, recreated using microorganisms in the dust, was carried out for 9 cycles and 69 experiments, and finally declared a failure in 1985. Why did it fail?Because Moutai cannot leave that place, and the microorganisms are different without that place.The wine produced by different microorganisms is different wine.What is the name of the wine specially approved by Premier Zhou Enlai?It's called Zhenjiu, and it's not bad, but it's not Moutai. In addition, the Japanese like to come to China to steal things the most. What do they steal?They stole the cloisonné to Japan to imitate it, and they did a very good job.They took a fancy to our Wuliangye and Luzhou Laojiao, so they came to steal again.What do Luzhou Laojiao and Wuliangye rely on to make wine?Rely on the mud in the wine cellar, the mud in the cellar, the dark one.They bought a piece of pit mud and brought it back to Japan, imitating Wuliangye and Luzhou Laojiao as much as possible.I do not know how many kinds of microorganisms there are in this pit mud. The wine made in Japan with these pit mud from abroad is not the same taste at all, because these microorganisms are not acclimatized to Japan, and most of them died.After moving back to China, especially after moving back to Sichuan Province, it became alive and well, very strange microorganisms.Why can this wine sell well?There is a core issue that cannot be separated from history and geography.This is the heart of wine.So how to get consumers to buy it?Especially when the economy is in recession, how to attract people to buy it? The core cannot be changed, and this core is history.The good wines we have seen, including Yanghe, Wuliangye, Jiannanchun, Luzhou Laojiao, Maotai, etc., all have a history.Must have history and geography.This kind of spice can only be found through the continuous accumulation of history, and this kind of spice must only be produced in this area.For example, Yanghe Daqu changed the previous single-grain to multi-grain.Another example is Wuliangye. The so-called Wuliangye refers to the brewing of five kinds of grains, one of which is buckwheat. Later, it was found that the taste of buckwheat was a bit bitter, so it was changed to wheat. Since the second half of 2008, affected by the global financial crisis, coupled with rising prices of major raw materials such as grain and fuel, the production and operating costs of liquor enterprises across the country have continued to increase.Today, when consumers tend to be conservative, the market demand for high-end liquor has shrunk to a certain extent.In key areas such as Beijing, Shanghai, Guangzhou, Nanjing and Zhengzhou, the sales of high-end liquor have dropped by 10% to 40%.For the first time since 2003, the entire liquor industry is facing the dual pressure of "surge in cost and sluggish demand".From the beginning of the opening of the market, "the fragrance of wine is not afraid of deep alleys", to the current era of globalized and highly competitive brands, it is not enough to rely solely on the inherent product core.So, what else does an enterprise need to do if it wants to remain invincible and win the favor of consumers?
In any case, all winery research and development must revolve around these microbes that history has given you.If history gives you these microorganisms, you can only do research and development on these microorganisms. You cannot leave this factory, nor can you leave these microorganisms, because these microorganisms are left to us by our ancestors.All winery research and development must be based on history and geography to be valuable. China's liquor industry is currently an industry that foreign capital cannot understand after entering China, because they don't know how to reproduce these microorganisms.Microorganisms are left to us by our ancestors, so loyal and reliable, even more reliable than friends, they just don’t leave our China or this specific place.The whole wine research and development process must have this core. To make a good wine, first of all, history and geography cannot be separated.And the core of this liquor is the essence of the industry.Grasping the essence of this industry, we can grow against the market during the recession. For example, Moutai’s net profit in the first quarter of 2009 was 1.217 billion yuan, a year-on-year increase of 39.35%; Wuliangye’s net profit in the first quarter of 2009 was 1.261 billion yuan, a year-on-year increase of 25.05% .Taking Chongqing as an example, during the Spring Festival in 2009, the sales volume of Luzhou Laojiao's high-end product Guojiao 1573 rose by 30%. In addition to liquor, the industries that foreign capital can't figure out include China's tourism industry.Most of our five-star hotels are built by Chinese and managed by foreign brands, but very few are directly invested by foreigners.However, foreign high-end tourist groups are unlikely to come to China. Westerners who come to China mostly use low-cost tour groups, because tourism relies on special historical and geographical precipitation.If it is not for the precipitation of history and geography, I think the natural landscape of several five-star hotels in Dongguan and the artificial lake dug in Dongguan industrial zone is no worse than West Lake.However, when we visit the West Lake, we will think of the Su Causeway of Su Dongpo, the White Causeway of Bai Juyi, Leifeng Pagoda and White Lady... But these special histories and geography will not make foreigners feel special. People would rather see the magnificent Swiss lakes. Let's discuss the so-called lipstick phenomenon. Don't simply think that the appearance of the lipstick phenomenon means that high-end brands will definitely decline, and mid- and low-end brands will definitely rise, so everyone cuts corners.Don't think about it that way, because consumers don't think about it that way. How should you think about the problem as a producer?To re-interpret the phenomenon of lipstick.The so-called lipstick phenomenon is that when the economy is in recession, consumers will choose products with high cost performance.Therefore, for enterprises, if they want to differentiate, they should not only focus on the differentiation of appearance and performance as in the past, but should grasp the essence of the industry and improve the cost performance. But the essence of an industry is a relatively difficult concept to understand. There are so many industries in China, what is the essence of each industry?I only make a brief summary for general consumer products (interested readers can refer to my other works, including the "Essence" series, "What You Think Is Wrong", "Blue Ocean Collapse", "Industrial Chain Conspiracy", etc. ). Washing machines, microwave ovens, refrigerators, etc., these are things that you will not show off to others. For this type of product, cost performance is particularly important. Cost performance is the essence of the industry. The essence of the industry of black home appliances such as TVs is the sales of technology-driven products. Let's take Procter & Gamble's four major products as an example: laundry detergent, green teeth, shampoo and cosmetics.Among them, only washing powder is purely cost-effective 1 as the industry essence, that is, it needs to be washed clean (performance), appearance is not too important, and the price should be cheap.In the process of transitioning from washing powder to tooth decay, to shampoo, and then to cosmetics, "individualized spiritual experience" (this is the essence of the industry) is becoming more and more important. gradually increased in importance.For example, the whole family will use the same toothpaste, but it is impossible for the whole family to use the same bottle of cosmetics.Cosmetics must have multiple brands, focus on feeling, and weaken product characteristics. This is the essence of the industry. The essence of the mobile phone industry is to first improve the brand image, enter the high-end market, accumulate a lot of "potential energy", and then attack the low-end market.Well-done mobile phone brands have this feature, such as Nokia, Motorola, Samsung, LG, Sony Ericsson, etc.These mobile phone brands accumulate potential energy by improving their brand image. For example, LG improves its brand image and accumulates potential energy by producing Prada mobile phones.But only Nokia has successfully entered the low-end mobile phone market, which is why Nokia's sales are always ranked first, because its low-end mobile phones sell well.It is not easy for many Chinese brands to directly enter the low-end market, because they have not accumulated "potential energy". For drinks to sell well, the virtual feeling is very important, such as putting the characteristics of young people into Pepsi, or linking the concept of Quhuo with Wanglaoji.In addition, the concept of "convenience" of convenience food should be integrated into traditional food, such as cans, small packages, easy to carry, etc., such as processed pork into small packages and convenient to eat ham sausage.But instant food needs to incorporate the nutritional concept of traditional food. For example, the packaging of many seafood instant noodles is dominated by beautiful seafood pictures. In fact, there is no seafood in the instant noodles. The essence of a computer is the feeling of a close companion. In the 1980s, the distance between people and computers was shortened by high technology. Today, the distance between computers and people is shortened in other ways, including humanization, computer functions and appearance like friends.For example, why does Apple Computer sell well?The main reason is that Apple launched an intimate partner that consumers will take with them - iPod, which makes consumers think of another intimate partner with humanized and lovely packaging - Apple Computer. Health care products first need a "core", that is, the product must have efficacy. For example, the core of melatonin is melatonin, which is helpful for sleep.But you can't give sleeping pills as a gift, it's ridiculous.Therefore, a "connection" must be found to connect the "core" with consumers. This connection is for the health of the elderly.So in the advertisement, two old people are dancing, and the slogan is "Give melatonin as a gift", almost completely ignoring the melatonin in melatonin. The essence of the camera industry is to give users "the feeling of a professional photographer".Canon's success is due to the fact that Canon has given the main functions of EOS digital single-lens reflex semi-automatic professional cameras to cameras used by ordinary players, including PowerShot (used by ordinary and semi-professional players) and Digtial IXUS (fashionable version for young people), thus promoting Canon's breakthrough. The essence of the toy industry must include three points: first, the ingredients of the toy must be safe; second, the touch of the toy must meet the requirements, for example, a doll must feel comfortable; third, the toy must meet the emotional appeal.Take Elmo as an example, the red Elmo is like a child who laughs wildly, walks backwards, is hysterical, and beats his chest. This feature of Elmo is connected to the emotional appeal of children through the connection of "Sesame Street". The essence of the cosmetics industry also includes three points: first, the ingredients of cosmetics must be safe; second, cosmetics must have efficacy; third, the brand of cosmetics must be personified.For example, the image spokesperson of SK-II is Qiqi, and the image she represents is "Girls must have their own careers after marriage, so that they can have self-confidence, and the communication with their husbands will be better...Girls must work to keep up Society... Work keeps people from falling behind", so SK-II is positioned as a product for high-end middle-aged women. Hardware and software together form the industry essence of this type of product. The hardware must achieve the effect of saving time, worry and effort, while the software must convey "happy kitchen culture".Since traditional small household appliances cannot meet consumers' time-saving, worry-free, and labor-saving requirements, they must meet their needs through creativity, such as three-second water heaters.In addition, the time-saving, worry-free, and labor-saving features are conveyed to consumers through advertisements as software, and at the same time, the concept of "happy kitchen culture" is conveyed. It is impossible for me to list all the consumer products here. Most of the consumer products not mentioned are combined with the nature of the industry mentioned above.But how do we convey the essence of the industry to consumers?This requires advertising.
The global financial crisis brought about the "lipstick effect". Encountered economic depression, the entire consumption pattern will undergo great changes. Through the analysis of the liquor industry, the occurrence of the "lipstick effect" is confirmed. So this is interesting, why are the low-end wines selling so well? Mastering the essence is the key to rebirth under crisis. How do you become a good entrepreneur?How do you become a good consumer?Be sure to thoroughly understand what the true nature of the industry is. Under the impact of the financial tsunami, a lipstick theory emerged.What is the lipstick theory?As far as women are concerned, you always have to wear makeup, you may not wear powder, because of the financial tsunami, you have lost your job and have no money or your income has decreased, but you still have to wear some lipstick.Even if you can't afford L'Oreal lipstick, you can always afford lipstick from the grocery store next door, so it's called the lipstick theory.In the event of an economic recession, the entire consumption pattern will undergo a major change, which is called lipstick-type consumption.This way of thinking is a bit simple. Let me list a few figures for readers to let you know what lipstick consumption is, and you will know how your consumption will transform under the impact of the financial tsunami in 2009.At the same time, I also want to tell our manufacturing practitioners how to adjust to meet the consumer demand under the impact of the financial tsunami. Affected by factors such as the world economic recession, domestic economic cyclical adjustments, and the deceleration of residents' real income growth, the domestic consumer confidence index in 2008 showed a trend of declining quarter by quarter.Judging from the actual market situation, housing consumption has dropped significantly; consumption of housing-related building materials, home appliances and other products is also much lower than in previous years; sales of so-called luxury goods such as high-end cosmetics, accessories, clothing and automobiles have also declined in many places across the country.However, the results of the "2009 Consumer Confidence and Willingness Survey" published by the China Consumers Association on March 12, 2009 showed that nearly 60% of consumers still have confidence in consumption in the domestic market.According to the analysis, in view of the country's consumption policy of stimulating domestic demand, it is entirely possible for Chinese enterprises to seek development by relying on consumers' willingness to consume.So, when the "lipstick effect" appears, what should Chinese companies do?
Now that we talk about the consumption of lipstick, let's take a look at lipstick. Taking the cosmetics industry as an example, from 2007 to 2008, the sales of the entire cosmetics industry fell by about 5.7%.Among them, L'Oreal's growth rate fell from 8% to 4%; Avon's North American sales fell by 3%; Revlon's net profit fell by 72%, and sales fell by 10%; Johnson & Johnson's sales fell by 5%.It can be seen that since the fourth quarter of 2008, the sales of these internationally renowned brands have experienced a significant decline, although it cannot be said to be a sharp decline, the decline range is 5% to 10%.However, Shanghai Jahwa, a mid- to low-end brand in Shanghai, bucked the trend and rose 13% in the fourth quarter of 2008.This phenomenon that high-end brands fall while low-end brands rise against the market is called the lipstick phenomenon. In addition, there is baijiu. Many people say that our Moutai and Wuliangye are irresistible, because drinking buddies like to drink this kind of liquor, and in the event of a financial tsunami, they will use it to soothe their worries.From the fourth quarter of 2008 to March 31, 2009, the sales of high-end liquor fell by 10%, while the sales of mid- and low-end liquor increased by 5% to 15%. Each region is different, for example, Chongqing is 15%.This phenomenon of high-end wine falling and low-end wine rising is the so-called lipstick phenomenon. But the lipstick phenomenon does not imply that consumers prefer cheap products during economic depression, but that consumers prefer cost-effective products during economic depression.The cost-effectiveness we understood in the past is the cost-effectiveness 1 shown in the formula. Cost performance 1 = (appearance + performance) / price The better the appearance of a product, the higher the performance, or the lower the price, the higher the cost performance.We sometimes even ignore the appearance and only talk about performance.The cost-effectiveness of the new concept should be added to the nature of the industry, like the cost-effectiveness 2 in the formula. Cost performance 2 = (appearance + performance + industry essence) / price In other words, under the same price, appearance and performance, if a product grasps the essence of the industry, the cost performance of the product will be improved.This new concept of the nature of the industry is my original creation, which has not been discussed in the management academic circle in the past.For example, Nike's sports shoes are all produced in China, and one of the foundries is called Yue Yuen Industry.Nike and Yue Yuen's products are sure to have the same appearance and quality, so why would you pay more for Nike's sneakers instead of Yue Yuen's?Because Nike has grasped the essence of the industry, but Yue Yuen has not.In the following chapters, I will explain the concept of the essence of the industry in detail through examples such as Nike. In the past, it was difficult for us to use cost-effectiveness to explain why Italian brand-name products are all produced in China, and their appearance and quality are the same as those of China's own products.We simply attribute this phenomenon to the influence of "brand".In fact, we can use cost-effectiveness 2 to explain, that is, Italian brands have grasped the essence of the industry, but our products have not, so their cost-effectiveness is high. For example, assume appearance = 10, performance = 10, industry essence of domestic brands = 0, and industry essence of Italian brands = 40. Domestic brand cost performance 2=(10+10+0)/price Italian brand cost performance 2=(10+10+40)/price Assuming that the price/performance ratio of domestic brands and Italian brands is both 4, then domestic brands can only be sold for 5 yuan, while the price of Italian brands can be set at 15 yuan. 4=(10+10+0)/5 4=(10+10+40)/15 In the past, we did not understand the huge impact of the nature of the industry on the cost performance. Although OEM can produce products with the same appearance and quality, there is no way to produce the "essence of the industry". Therefore, the price of our products cannot be sold, and we can only sell them for 5 yuan. , and the Italian brand produced in China can be sold for 15 yuan due to the nature of the industry. To give another example, in the first quarter of this year, the sales of the international first-line luxury brands of Guangzhou Friendship Store and La Perle Plaza unexpectedly increased by 20% despite the global market plummeting.However, what is strange is that the sales of second- and third-tier luxury goods at low and medium prices plummeted by 30% to 40%.We have noticed that in the first half of 2009, these first-tier international brands launched a big price reduction campaign in Guangzhou for promotion. Some Chanel products were even sold at a discount of less than 50%, which defeated the second- and third-tier brands.I use the same formula to explain this phenomenon.Cost-effectiveness of domestic second- and third-tier brands2: 4=(10+10+0)/5 Cost-effectiveness of international first-line brands 2: 4=(10+10+40)/15 Originally, domestic brands and international first-line brands had the same price-performance ratio of 4, so the two share the market equally.If the price of an international first-line brand drops by half to 7.5 yuan, then its cost performance becomes 8 yuan. 8=(10+10+40)/7.5 Due to the big price cuts of first-tier brands, the cost performance of first-tier brands has risen from 4 to 8, which is far higher than the cost performance of second- and third-tier brands. Of course, consumers will choose first-tier brands without hesitation, resulting in a reverse sales of first-tier brands. The market rises, while the sales of second- and third-tier domestic brands plummet. During the recession period, the behavior of consumers will tend to focus on the "lipstick effect" of cost-effectiveness. Therefore, for enterprises, if they want to differentiate, they must not only pay attention to cost-effectiveness as in the past1 (that is, to improve the differentiation of appearance or Performance differentiation), but also to sublimate to the stage of cost performance 2, and improve cost performance by grasping the nature of the industry.Let's discuss what is the nature of the industry through liquor. I want to use liquor as an entry point to let our consumers know what they are thinking, and let producers know what to do to meet the needs of consumers.We are basically fooled when we drink liquor. For example, our high-strength liquor claims to have 52% alcohol content. Do you believe it?Nonsense.Our human body can hardly bear 40% alcohol content. If you don’t believe it, you can pour 40% edible alcohol into it and drink it. It’s painful to death.Think about it, when you get an injection, it is so uncomfortable to apply some alcohol to disinfect it. How does it feel when you drink 40% alcohol?In fact, you are not drinking alcohol at all, so what are you drinking? How do we measure alcohol concentration?Readers have learned about density, right?learned.What is the density of water? 1.What is the density of alcohol? 0.8.What does it mean if the wine is made and the measurement shows a density of 0.9?That means 50% alcohol by volume, right?very simple.Our international standard "GB 10345-2007 Liquor Analysis Method" recognizes the use of this density method to measure alcohol content.Therefore, if we use the simplest method to calculate, as long as the density is 0.9, it means that the alcohol concentration is 50%.I tell you, this is misleading.Why do you say that?Take the strong-flavored wine as an example, do you know what you are really drinking?Ethyl acetate, that's what really makes you smell booze.This spice is dissolved in alcohol and you get this spice when you drink it, do you know what the density of this spice is? 0.9.What does this mean?You are overestimating the alcohol content in baijiu. Let's play a number game. Suppose water, alcohol and spices each account for 1/3. We already know that the density of water is 1, the density of alcohol is 0.8, and the density of spices is 0.9. Now let's calculate, these three substances Adding them together and dividing by 3 is 0.9, which is the density of 50-degree liquor.But don't forget, there is this spice, its density is exactly 0.9.So what's the end result?The true alcohol content is only 33%, which you can't tell from the proof.The alcohol in the so-called 52-degree liquor may actually be only 33%, because 1/3 of it is spices.I heard that the alcohol concentration of high-grade wine is absolutely nonsense, because there are many spices dissolved in it, so high-grade wine is particularly mellow. The density of 1/3 spices plus 1/3 alcohol and 1/3 water is 0.9, so the marked alcohol degree is still 50 degrees.On the other hand, the actual alcohol content of the liquors on the market cannot be as high as the standard alcohol content. Of course, in fact, it is impossible to have 1/3 as many spices in liquor.why?This is like the miso soup that everyone drinks when eating Japanese food. This soup is very delicious because it also contains "spices".But the chef didn't put special spices, no five-spice powder, chili powder, nothing. In 1907, there was a Japanese named Ikeda Kikunae, a professor at the University of Tokyo, who was thinking about it when he had nothing to do. Since the chef didn’t put this spice in, the umami taste of miso soup must come from some kind of raw material. ?After much deliberation, he found that kelp was the most suspect, so he boiled the kelp, leaving only the soup, and then steamed the soup completely, leaving a brown crystal.Finally, after continuous separation and purification, it was found that the ingredient inside was monosodium glutamate, which is our "MSG" today.Don't put too much MSG, too much soup will be salty, of course, it can't be too little, too little soup will not have enough umami.Our baijiu is the same as miso soup. The best baijiu made from pure grains does not have special spices.But any good wine must be inseparable from two processes, one is repeated fermentation and multiple wine extractions, and the other is blending.Repeated fermentation can ensure that enough spices are produced, and the proportion of different spices in the wine taken out each time is not the same, so that the appropriate proportion can be adjusted by blending again.So no matter what liquor, the core of the whole product is spices.The older the wine, the more perfect the proportion of spices.The freshly brewed wine is similar to the freshly brewed soup, with 98% of the ingredients in place, and only a little "monosodium glutamate" needs to be added to make it perfect.Just such a little "MSG" makes you not feel how spicy the alcohol is.Therefore, 50-degree liquor tastes very mellow, while the half-water and half-alcohol mixture has only a choking feeling. Since the invention of wine, it has undergone tremendous changes from family courtyards to workshops covering hundreds of miles, and then to industrial production expanding to every corner of the world.The degree of industrialization and scale of Chinese liquor enterprises is getting higher and higher. In 2008, China's liquor production reached 5.693 million tons.In the same year, Moutai also achieved the best results in history, with the output reaching 20,000 tons that year.In the 2008 list of the top 500 global listed companies released by the British "Financial Times" recently, Kweichow Moutai was on the list, ranking 363rd among the world's top 500 companies, and ranked ninth in the global beverage industry. The only company on the list in the industry.However, the alcohol in the process of high-speed industrialization is different from the ancient brewing technology, which contains many unknown secrets.So, what is the story behind the world-renowned Moutai?
Let me give you an example, why do you drink Moutai?Moutai is a sauce-flavored wine.What is sauce-flavored?What is Luzhou-flavored?To put it simply, wine made mainly of wheat is called Maotai-flavored, while others are Luzhou-flavored.Almost only Moutai is the sauce-flavored liquor in China, and most of the others are Luzhou-flavored.How many spices can you guess in Moutai? There are more than 200 kinds, of which there are more than 100 kinds that we still don't know what it is.We also don't know most of the spices in Luzhou Laojiao and Wuliangye.But it is strange that these spices are only available in a certain area. How do you become a good entrepreneur?How can you be a good consumer?You must thoroughly understand what the nature of this industry is.Let me take Moutai as an example. Do you know that Moutai can only be produced in Moutai Town, Kweichow? More than 30 years ago, our Premier Zhou gave Fang Yi, then Vice Premier of the State Council, a task to copy Moutai.It is said that at that time, Vice Premier Fang Yi brought a group of people to take away all the processes and equipment of Moutai, and even the master craftsman who made the wine. Rich microorganisms are necessary for making Moutai), searched around, found 50 places, and finally found a place in Zunyi with beautiful mountains and clear waters and no industrial pollution, unfolded all the processes of Moutai, and used local Very pure water, recreated using microorganisms in the dust, was carried out for 9 cycles and 69 experiments, and finally declared a failure in 1985. Why did it fail?Because Moutai cannot leave that place, and the microorganisms are different without that place.The wine produced by different microorganisms is different wine.What is the name of the wine specially approved by Premier Zhou Enlai?It's called Zhenjiu, and it's not bad, but it's not Moutai. In addition, the Japanese like to come to China to steal things the most. What do they steal?They stole the cloisonné to Japan to imitate it, and they did a very good job.They took a fancy to our Wuliangye and Luzhou Laojiao, so they came to steal again.What do Luzhou Laojiao and Wuliangye rely on to make wine?Rely on the mud in the wine cellar, the mud in the cellar, the dark one.They bought a piece of pit mud and brought it back to Japan, imitating Wuliangye and Luzhou Laojiao as much as possible.I do not know how many kinds of microorganisms there are in this pit mud. The wine made in Japan with these pit mud from abroad is not the same taste at all, because these microorganisms are not acclimatized to Japan, and most of them died.After moving back to China, especially after moving back to Sichuan Province, it became alive and well, very strange microorganisms.Why can this wine sell well?There is a core issue that cannot be separated from history and geography.This is the heart of wine.So how to get consumers to buy it?Especially when the economy is in recession, how to attract people to buy it? The core cannot be changed, and this core is history.The good wines we have seen, including Yanghe, Wuliangye, Jiannanchun, Luzhou Laojiao, Maotai, etc., all have a history.Must have history and geography.This kind of spice can only be found through the continuous accumulation of history, and this kind of spice must only be produced in this area.For example, Yanghe Daqu changed the previous single-grain to multi-grain.Another example is Wuliangye. The so-called Wuliangye refers to the brewing of five kinds of grains, one of which is buckwheat. Later, it was found that the taste of buckwheat was a bit bitter, so it was changed to wheat. Since the second half of 2008, affected by the global financial crisis, coupled with rising prices of major raw materials such as grain and fuel, the production and operating costs of liquor enterprises across the country have continued to increase.Today, when consumers tend to be conservative, the market demand for high-end liquor has shrunk to a certain extent.In key areas such as Beijing, Shanghai, Guangzhou, Nanjing and Zhengzhou, the sales of high-end liquor have dropped by 10% to 40%.For the first time since 2003, the entire liquor industry is facing the dual pressure of "surge in cost and sluggish demand".From the beginning of the opening of the market, "the fragrance of wine is not afraid of deep alleys", to the current era of globalized and highly competitive brands, it is not enough to rely solely on the inherent product core.So, what else does an enterprise need to do if it wants to remain invincible and win the favor of consumers?
In any case, all winery research and development must revolve around these microbes that history has given you.If history gives you these microorganisms, you can only do research and development on these microorganisms. You cannot leave this factory, nor can you leave these microorganisms, because these microorganisms are left to us by our ancestors.All winery research and development must be based on history and geography to be valuable. China's liquor industry is currently an industry that foreign capital cannot understand after entering China, because they don't know how to reproduce these microorganisms.Microorganisms are left to us by our ancestors, so loyal and reliable, even more reliable than friends, they just don’t leave our China or this specific place.The whole wine research and development process must have this core. To make a good wine, first of all, history and geography cannot be separated.And the core of this liquor is the essence of the industry.Grasping the essence of this industry, we can grow against the market during the recession. For example, Moutai’s net profit in the first quarter of 2009 was 1.217 billion yuan, a year-on-year increase of 39.35%; Wuliangye’s net profit in the first quarter of 2009 was 1.261 billion yuan, a year-on-year increase of 25.05% .Taking Chongqing as an example, during the Spring Festival in 2009, the sales volume of Luzhou Laojiao's high-end product Guojiao 1573 rose by 30%. In addition to liquor, the industries that foreign capital can't figure out include China's tourism industry.Most of our five-star hotels are built by Chinese and managed by foreign brands, but very few are directly invested by foreigners.However, foreign high-end tourist groups are unlikely to come to China. Westerners who come to China mostly use low-cost tour groups, because tourism relies on special historical and geographical precipitation.If it is not for the precipitation of history and geography, I think the natural landscape of several five-star hotels in Dongguan and the artificial lake dug in Dongguan industrial zone is no worse than West Lake.However, when we visit the West Lake, we will think of the Su Causeway of Su Dongpo, the White Causeway of Bai Juyi, Leifeng Pagoda and White Lady... But these special histories and geography will not make foreigners feel special. People would rather see the magnificent Swiss lakes. Let's discuss the so-called lipstick phenomenon. Don't simply think that the appearance of the lipstick phenomenon means that high-end brands will definitely decline, and mid- and low-end brands will definitely rise, so everyone cuts corners.Don't think about it that way, because consumers don't think about it that way. How should you think about the problem as a producer?To re-interpret the phenomenon of lipstick.The so-called lipstick phenomenon is that when the economy is in recession, consumers will choose products with high cost performance.Therefore, for enterprises, if they want to differentiate, they should not only focus on the differentiation of appearance and performance as in the past, but should grasp the essence of the industry and improve the cost performance. But the essence of an industry is a relatively difficult concept to understand. There are so many industries in China, what is the essence of each industry?I only make a brief summary for general consumer products (interested readers can refer to my other works, including the "Essence" series, "What You Think Is Wrong", "Blue Ocean Collapse", "Industrial Chain Conspiracy", etc. ). Washing machines, microwave ovens, refrigerators, etc., these are things that you will not show off to others. For this type of product, cost performance is particularly important. Cost performance is the essence of the industry. The essence of the industry of black home appliances such as TVs is the sales of technology-driven products. Let's take Procter & Gamble's four major products as an example: laundry detergent, green teeth, shampoo and cosmetics.Among them, only washing powder is purely cost-effective 1 as the industry essence, that is, it needs to be washed clean (performance), appearance is not too important, and the price should be cheap.In the process of transitioning from washing powder to tooth decay, to shampoo, and then to cosmetics, "individualized spiritual experience" (this is the essence of the industry) is becoming more and more important. gradually increased in importance.For example, the whole family will use the same toothpaste, but it is impossible for the whole family to use the same bottle of cosmetics.Cosmetics must have multiple brands, focus on feeling, and weaken product characteristics. This is the essence of the industry. The essence of the mobile phone industry is to first improve the brand image, enter the high-end market, accumulate a lot of "potential energy", and then attack the low-end market.Well-done mobile phone brands have this feature, such as Nokia, Motorola, Samsung, LG, Sony Ericsson, etc.These mobile phone brands accumulate potential energy by improving their brand image. For example, LG improves its brand image and accumulates potential energy by producing Prada mobile phones.But only Nokia has successfully entered the low-end mobile phone market, which is why Nokia's sales are always ranked first, because its low-end mobile phones sell well.It is not easy for many Chinese brands to directly enter the low-end market, because they have not accumulated "potential energy". For drinks to sell well, the virtual feeling is very important, such as putting the characteristics of young people into Pepsi, or linking the concept of Quhuo with Wanglaoji.In addition, the concept of "convenience" of convenience food should be integrated into traditional food, such as cans, small packages, easy to carry, etc., such as processed pork into small packages and convenient to eat ham sausage.But instant food needs to incorporate the nutritional concept of traditional food. For example, the packaging of many seafood instant noodles is dominated by beautiful seafood pictures. In fact, there is no seafood in the instant noodles. The essence of a computer is the feeling of a close companion. In the 1980s, the distance between people and computers was shortened by high technology. Today, the distance between computers and people is shortened in other ways, including humanization, computer functions and appearance like friends.For example, why does Apple Computer sell well?The main reason is that Apple launched an intimate partner that consumers will take with them - iPod, which makes consumers think of another intimate partner with humanized and lovely packaging - Apple Computer. Health care products first need a "core", that is, the product must have efficacy. For example, the core of melatonin is melatonin, which is helpful for sleep.But you can't give sleeping pills as a gift, it's ridiculous.Therefore, a "connection" must be found to connect the "core" with consumers. This connection is for the health of the elderly.So in the advertisement, two old people are dancing, and the slogan is "Give melatonin as a gift", almost completely ignoring the melatonin in melatonin. The essence of the camera industry is to give users "the feeling of a professional photographer".Canon's success is due to the fact that Canon has given the main functions of EOS digital single-lens reflex semi-automatic professional cameras to cameras used by ordinary players, including PowerShot (used by ordinary and semi-professional players) and Digtial IXUS (fashionable version for young people), thus promoting Canon's breakthrough. The essence of the toy industry must include three points: first, the ingredients of the toy must be safe; second, the touch of the toy must meet the requirements, for example, a doll must feel comfortable; third, the toy must meet the emotional appeal.Take Elmo as an example, the red Elmo is like a child who laughs wildly, walks backwards, is hysterical, and beats his chest. This feature of Elmo is connected to the emotional appeal of children through the connection of "Sesame Street". The essence of the cosmetics industry also includes three points: first, the ingredients of cosmetics must be safe; second, cosmetics must have efficacy; third, the brand of cosmetics must be personified.For example, the image spokesperson of SK-II is Qiqi, and the image she represents is "Girls must have their own careers after marriage, so that they can have self-confidence, and the communication with their husbands will be better...Girls must work to keep up Society... Work keeps people from falling behind", so SK-II is positioned as a product for high-end middle-aged women. Hardware and software together form the industry essence of this type of product. The hardware must achieve the effect of saving time, worry and effort, while the software must convey "happy kitchen culture".Since traditional small household appliances cannot meet consumers' time-saving, worry-free, and labor-saving requirements, they must meet their needs through creativity, such as three-second water heaters.In addition, the time-saving, worry-free, and labor-saving features are conveyed to consumers through advertisements as software, and at the same time, the concept of "happy kitchen culture" is conveyed. It is impossible for me to list all the consumer products here. Most of the consumer products not mentioned are combined with the nature of the industry mentioned above.But how do we convey the essence of the industry to consumers?This requires advertising.