I. Current Status and Corporate Background of Kerry Oils & Grains in the Industry According to survey data released by the Ministry of Internal Trade, Kerry Oils & Grains' Arawana edible oil brand has held the top position in the packaged edible oil industry for 10 years with an absolute advantage, with its market share exceeding the total of the second to tenth place brands combined. Among the top ten edible oil brands nationwide, Kerry's brands occupy three positions, with a trend of increasing. In the annual survey of consumer goods in major cities since 1994, Arawana's brand awareness is 5 times higher than the second-ranked competing brand; it is the best brand in consumers' minds, with Arawana being 8 times higher than the second-ranked competitor. The sales of just the three major Kerry brands—Arawana, Hujihua, and Carp—exceed the combined sales of the remaining brands in the top ten. If the sales of the other 13 brands are added, Kerry Oils & Grains accounts for nearly half of China's packaged edible oil market. In 2000, the total sales of packaged edible oil in China were about 10 billion yuan, and the Kerry team led by Managing Director Li Fuguan accounted for 4 billion of that. In 2007, Kerry Oils & Grains' packaged oil sales reached 40 billion yuan. Currently, Kerry Oils & Grains is also a well-known domestic supplier of specialty oils and fats, with representative products including: Citibank, Saniya, Gold Swallow brand margarine and shortening, Jinli cocoa butter substitute, specialty oils, baking series, and catering-specific oils: Haihuang brand series. In 2005, Kerry Oils & Grains fully entered the food industry, focusing on rice processing, supplemented by soybean, corn, and coarse grain trade and processing, successfully launching the "Xiangyan", "Xiangmanyuan", and "Gold Ingot" brand rice, and "Blue Spoon" and "Xiangmanyuan" brand flour. Oleochemical products include: Ruilong brand stearic acid, soap granules, glycerin, and various fatty acids. Achieving such brilliant results, although related to Kerry Oils & Grains' strong financial background (Note: Kerry Oils & Grains is a subsidiary of the famous Kuok Brothers Group. The Kuok Brothers Group was founded in 1949, initially operating in rice, sugar, and flour in Johor Bahru, Malaysia. In 1953, Kuok Brothers (Singapore) Limited was established, and it has now become one of Asia's most diversified multinational enterprise groups. The group focuses on grain and oil processing, oleochemicals, warehousing and logistics, and domestic and foreign trade, and is also a diversified enterprise group integrating coal operations, clean energy development, and real estate. It is also the largest grain and oil processing group in China. After more than ten years of development, it has become an internationally renowned grain and oil processor and trader, having invested in more than 40 grain, oil, and food production and processing enterprises in China. The founder, Robert Kuok, a Malaysian Chinese, is world-renowned as the "Sugar King of Asia" and a hotel industry giant. In 1974, Kerry Group Limited was established in Hong Kong. Mainland China and Hong Kong became the focus of the Kuok Brothers Group's further regional development. The name "Kerry" has become the symbol of the Kuok Brothers Group's business in China), but the main reason for its success is Kerry Oils & Grains' keen market foresight and correct marketing strategies. Below we analyze the process of Kerry Oils & Grains' efforts and the company's strengths in achieving excellent results in China in just over ten years, and dissect why Kerry Oils & Grains has been able to achieve such tremendous success in the Chinese market. II. Keen Market Foresight, Correct Marketing Strategies, and Fulfillment of Corporate Social Responsibility Have Created Kerry Oils & Grains' Success (1) Discovering the Market

  1. Seizing the opportunity of "Reform and Opening Up," Kerry Oils & Grains boarded this economic express train, laying the foundation for the company's future development. Since the reform and opening up, China's three economic reform experimental zones—Shenzhen in Guangdong, Pudong in Shanghai, and Binhai in Tianjin—are all in the eastern coastal region, driving the rapid development of the entire eastern coastal area. Among them, Shenzhen, once an unknown small fishing village, has become one of China's most open and developed cities. The establishment of coastal special economic zones greatly boosted Kerry Oils & Grains' confidence in investing in China. 1.1 Reform and opening up, government preferential policies for foreign investment Since the reform and opening up, China has implemented comprehensive tax preferential principles for foreign-invested enterprises and foreign enterprises investing in China. The preferential policies stipulate relaxing leadership, liberalizing policies, lowering thresholds, and boldly developing an export-oriented economy, firmly establishing the awareness of pro-business, business-settling, and business-enriching, and mobilizing the whole city's efforts to attract investment. Various localities and development zones, while implementing existing national, provincial, and municipal preferential policies, have formulated more preferential and competitive policies and measures based on their actual conditions, lowering the threshold for foreign investment. For some major industrial projects, high-tech projects, projects with high industrial correlation, and infrastructure projects, a "one enterprise, one policy" approach is adopted, with special handling for special cases, and special preferences are given according to investor requirements. This played a very important role in attracting foreign capital and advanced technology. At the same time, it was extremely tempting for foreign investors. At that time, Kerry Oils & Grains' leaders saw this and began to invest in a factory in Shenzhen, Guangdong. 1.2 Discovering the gap in the edible oil market. Ten years ago, almost no one dared to imagine that China's packaged edible oil market would be so large. Kerry Oils & Grains' Managing Director Li Fuguan introduced that Kerry Oils & Grains was the first enterprise in China to introduce packaged edible oil. At that time, in the late 1980s, the social economy was developing rapidly, and people's living standards had greatly improved, leading to higher quality requirements for consumer goods. Worryingly, China did not yet have packaged edible oil at this stage; the market was flooded with bulk edible oil with many impurities, lots of smoke, and no guarantee of hygiene and safety. The market for packaged edible oil that met international hygiene standards was still blank. Against this background, the Kuok Brothers of Singapore, after inspecting foreign markets, believed that packaged oil would definitely have a huge market in China. In 1990, they established Nanhai Oil Industry (Chiwan) Co., Ltd., starting the production of the first batch of packaged edible oil, with the first brand launched being Arawana. Brands like Fulinmen and Luhua, which became major brands more than ten years later, had not yet started at that time, which reduced resistance to Kerry's brand promotion and also created a "first-mover" effect for the enterprise. 1.3 Using "welfare oil" to enter the market. What everyone now feels is normal was not easily accepted ten years ago. In 1990, facing a market where packaged edible oil almost did not exist, changing people's living habits was very difficult. Li Fuguan submitted a report to the board: prepare to spend three years and invest 20 million yuan to open the door to China's packaged edible oil market. After one year, sales reached 3,000 tons. Through thinking and investigation, they found that Chinese enterprises and institutions had the habit of distributing "welfare" goods during festivals, which is a Chinese characteristic, and it was this characteristic that promoted the popularization and spread of packaged edible oil. (2) Actively Adopting the "4P" Strategy to Promote the Enterprise's Takeoff in the Industry
  2. Product Deliberation 1.1 Packaging Design Design conforms to Chinese traditional habits. From the beginning, the enterprise raised the brand banner, wanting its packaged edible oil to have a resounding brand name—Arawana is a large tropical ornamental fish. Because it has two barbels on its mouth and its body flashes with dreamlike light, people naturally associate it with the legendary dragon, calling it "dragon fish." In Southeast Asia and other Chinese-populated areas, Arawana is regarded as a symbol of wealth and good fortune. The enterprise found this to be a good name right at hand, with a strong Chinese flavor. The three characters "Jin Long Yu" sound pleasant together and, when separated, carry the meaning of "good luck and happiness." In terms of outer packaging, the enterprise required that the overall visual effect of Arawana packaged oil be exquisite, friendly, and noble, so the designers made the bottle label packaging design extremely refined. Displayed on food shelves in stores, it is the most eye-catching. In this way, Arawana not only adopted the dragon and fish that Chinese people love to see and hear in its name, but also used red and yellow in its colors, and even adopted the rich fragrance style most suitable for Chinese people in its taste. These positioning choices made Arawana packaged oil easy to accept because of its strong Chinese characteristics. 1.2 Technological Innovation Leading a Healthy Life, Advocating Dietary Fatty Acid Balance "1:1:1" If building the "Arawana" brand is Kerry Oils & Grains' corporate pursuit, then "Healthy Life, Arawana" is their greatest commitment to consumers. In fact, Arawana has been vigorously promoting the concept of healthy edible oil, from initially advocating safe, hygienic, healthy, and convenient packaged edible oil, to rapidly developing high-end edible oils with health benefits. Healthy oil use is almost the main theme of "Arawana." In 2002, Kerry Oils & Grains extended its research on edible oil and human health into the field of fatty acids, and based on the balanced nutrition of dietary fatty acids for the human body, developed Arawana second-generation blended oil. Kerry Oils & Grains became the first enterprise in China's edible oil industry to advocate "1:1:1" dietary fatty acid balance and apply it to food oil development. To this day, the sales and influence of Arawana blended oil 1:1:1 products occupy a dominant position in China's packaged oil market, accounting for 60% of the enterprise's various product items, adding to the enterprise's market competitiveness. On June 18, 2005, 13 famous Chinese oil industry experts from the Oil and Fat Professional Branch of the Chinese Cereals and Oils Association, the Xi'an Oil Research and Design Institute of the State Grain Administration, the Wuxi Science Research and Design Institute of the State Grain Administration, and Jiangnan University gathered in Shanghai to evaluate the technology and quality of "Arawana" second-generation edible blended oil products. After carefully reviewing the design ideas, theoretical basis, production process, and quality management system of "Arawana" second-generation blended oil products, they gave recognition to the technology and quality of "Arawana Second-Generation Blended Oil 1:1:1" produced by Kerry Oils & Grains. Following the first revolution from bulk oil to packaged oil, China's edible oil industry has welcomed the baptism of a second revolution, leading the consumption concept of edible oil from a single taste to the health level of fatty acid balance. The entire market will also undergo renewal and reshuffling. With the increasing domestic purchasing power, the edible oil consumption market has bid farewell to the era of traditional earth-pressed and bulk oil that lasted for thousands of years, and has entered a market pattern dominated by packaged edible oil that pursues quality, nutrition, and health. Products have also shifted from low-level price competition to competition at a higher level of nutritional concepts. However, healthy edible oil is not easily obtained; only through high-end scientific technology, advanced production equipment, and strict quality management can truly healthy edible oil be produced. In 2004, to launch products more suitable for the nutritional health of Chinese residents, Kerry Oils & Grains invested more than 20 million yuan to build a large R&D center in Shanghai. It also introduced multiple fully automated production lines for oil refining, packaging, and specialty oil production from abroad. The establishment of Kerry Oils & Grains' Shanghai R&D center not only provided a guarantee for developing healthier, more nutritious, and balanced oil products for consumers, but also made it a reality for Kerry Oils & Grains to design and produce personalized, differentiated healthy grain and oil products according to the health needs of different consumer groups. 1.3 Energy Conservation, Environmental Protection, and Circular Economy—To a certain extent, reducing production costs and enhancing product market competitiveness. A grain of rice, after husking, the rice husk is transported to the power plant for thermal power generation, and the burned husk is made into a natural filter aid; rice bran is sent to the workshop, where the extracted rice bran oil is processed into high-quality, nutritionally valuable rice bran edible oil, and after oil extraction, rice bran meal is formed; the rice becomes branded rice. In this way, a grain of rice achieves full utilization without waste or pollution. In Kerry Oils & Grains, this has become a reality. China's edible oil imports have a large gap, but China's rice production ranks first in the world. Currently, due to the small processing scale of domestic rice mills, they do not have the conditions to process rice bran oil, and rice bran stored for more than a certain time is prone to rancidity, leading to a large waste of resources. Kerry takes advantage of China's abundant rice resources, and by developing a circular economy for rice, it has developed new rice bran edible oil, greatly supplementing China's edible oil resources; at the same time, using rice husks as fuel for power generation is both environmentally friendly and turns waste into treasure, greatly increasing the added value of rice. As a result, Yihai (Jiamusi) Grain and Oil Industry Co., Ltd. and Yihai (Jiamusi) Biomass Power Generation Co., Ltd. are now able to purchase rice from farmers at prices higher than the market price. In Kerry's power plant, 1.75 tons of rice husk is equivalent to 1 ton of standard coal. The unique power generation device also reduces carbon dioxide emissions and smoke emissions. In the past, rice husks were generally discarded by farmers, and their degradation time in the natural environment was about 5 years. Now, the Yihai Jiamusi company, which started production in 2007, processes an annual output of rice and rice products of over 100,000 tons, with an annual power generation of over 20 million kilowatt-hours. By intervening in a single grain of rice, Kerry has developed independent rice products and aspires to become a first-class domestic rice brand. Currently, Kerry's rice products have developed into four major brand series: "Xiangmanyuan", "Gold Ingot", "Carp", and "Xiangyan", with more than 30 specifications, and have passed C-mark, ISO9000, and HACCP certifications. At the end of 2007, the company's main brands "Xiangmanyuan Special Grade Pearl Rice", "Xiangmanyuan Special Grade Long-Grain Fragrant Rice", "Gold Ingot Special Grade Long-Grain Fragrant Rice", "Gold Ingot Special Grade Northeast Rice", and "Gold Ingot High-Quality Northeast Rice" were successively awarded green food certificates by the China Green Food Development Center. Utilizing the abundant grain resources of Northeast China, Kerry Oils & Grains has also constructed a complete industrial chain of "excellent seed selection - contract planting - deep processing - product branding - comprehensive utilization of by-products - high-tech product R&D." It plans to deeply develop and reuse by-products to extract more than ten high-value-added products such as activated carbon, white carbon black, VE health products, sterols, and sphingosine. 1.4 Multi-Brand Strategy—Blocking Competitors and Consolidating the Position of Enterprise Products Looking at the brand development path of Arawana over the past 10 years, it has experienced a process from nothing to something, from few to many, from weak to strong. Through a comprehensive observation and perspective of its brand cultivation, brand maintenance, brand innovation, and multi-brand strategy, we can clearly feel the context of successfully creating a famous brand. Kerry Oils & Grains is a management and marketing company established by the Kuok Brothers Group of Singapore to manage its grain and oil business in China. In 1991, China's first bottle of Arawana packaged blended oil came out. From then on, Kerry Oils & Grains knocked on the door of China's packaged edible oil market. The birthplace of "Arawana" is Chiwan in Shekou, Shenzhen, with unique geographical advantages. The Arawana, symbolizing good fortune and wealth, started from this harbor and quickly swam inland from the port city of Shenzhen, occupying the shelves of many urban shopping malls and supermarkets. Today, Kerry Oils & Grains has shown its report card to the Chinese food industry: the domestic market share of "Arawana" and other packaged edible oils under Kerry Oils & Grains is nearly 40%; Kerry, which changed the history of Chinese people's long-term consumption of crude oil and second-grade oil with packaged oil, exceeded 1 million tons in sales scale in 2003, and 3 million tons in 2007, with an annual growth rate of over 30%, steadily advancing toward the goal of "the world's best grain and oil food processing group." When more people use packaged edible oils such as "Arawana," Kerry Oils & Grains clearly sees that no market can be monopolized by one company. The imbalance of China's economic development and differences in regional consumption habits determine that the market has different needs. Therefore, Kerry Oils & Grains timely launched 12 oil types in the "Arawana" series and second- and third-tier brands (Hujihua, Gold Ingot, etc.), implementing a multi-brand strategy. These brands each have their own unique positioning. "Arawana" is a high-end comprehensive brand with multiple varieties such as blended oil, corn oil, peanut oil, and soybean oil. "Gold Ingot", "Carp", and "Hujihua" are professional brands for soybean oil, rapeseed oil, and peanut oil, respectively. They can win the favor of different consumer groups by formulating different sales strategies and plans. The most important thing in such an arrangement is to have Kerry Oils & Grains products appear in every market segment. Competition is everywhere and at all times, and it cannot be avoided. Rather than competing with peers, it is better to compete with oneself. The multi-brand strategy of racing with itself formulated by Kerry Oils & Grains is precisely to use the advantages of multiple brands to improve overall sales performance, treating all the company's brands as a whole rather than artificially distinguishing the market. By organically combining the main brand with professional brands, leveraging overall advantages, it plays an important role in market competition, consolidates the strong position of brands in market operations, and thus creates a brand kingdom with "Arawana" as the main national brand, strongly supported by local brands.
  3. Strategic "Pricing," Covering "High, Medium, and Low" Products for Different Target Markets. The imbalance of China's economic development and differences in regional consumption habits determine that the market has different needs. In response to this, the enterprise takes market demand as the guide, gives clear positioning to the many brands in the group, and tries to be targeted in competition. Arawana, as a high-end comprehensive brand, is the group's first-line brand; Gold Ingot, Carp, and Hujihua are professional brands, the group's second-line brands; others are third-line brands. There are different directions in positioning, pricing, and market operations among the many brands. Arawana is a comprehensive strong brand, positioned as "high-end, core," among which: "corn oil and sunflower seed oil are mainly targeted at high-income and elderly consumer groups; olive oil is targeted at urban white-collar women who pursue quality of life; blended oil and peanut oil are mainly for middle- and high-income mass consumer groups..." Gold Ingot, Carp, and Hujihua are professional brands, mainly targeting the middle- and low-end markets. Xiangmanyuan, Citibank, Handmark, etc. are regional competitive brands, mainly targeting the low-end market, provided to low-income consumer groups. Haihuang is exclusively for the catering industry. Saniya, Gold Swallow brand margarine and shortening, and Jinli cocoa butter substitute are mainly aimed at food processing plants. 2.1 Leading Brand Shapes Leading Image Arawana is the first brand in the packaged edible oil industry and also a multi-variety brand product. Kerry Oils & Grains hopes to shape the Arawana brand as a high-quality edible oil expert and position Arawana as a high-end product in edible oil. Therefore, to maintain the image of the first brand, the enterprise will not extend Arawana products to the middle- and low-end markets. In the current new era of fierce market competition, product convergence, and rising customer rights, consumers no longer consume products to meet needs but to satisfy desires. Consumption is a desire, driven by desire. The real profit of a product comes from satisfying people's desires, not needs. To shift products from need-satisfying to desire-satisfying, brand equity is required—purchasing beyond basic needs. This is Kerry's cleverness. If Arawana were extended to the middle- and low-end markets, the image of low-end products would inevitably affect high-end products through brand effect, impacting the brand image of "edible oil expert" in consumers' minds and damaging Arawana's brand equity. Because in consumers' minds, high quality does not equal low price! And to not lose the huge middle- and low-end market share, the wise approach is to launch new brands to seize this market. 2.2 Low-Price Brands to Cope with Price Wars Arawana is unwilling to engage in price wars because its market share is relatively large; reducing the price by one yuan would mean a loss of at least several hundred million yuan for the enterprise. It is also for the need to maintain brand image, so it cannot affect its "edible oil expert" positioning for the sake of price wars. To cope with price wars without damaging Arawana's brand image, Kerry Oils & Grains launched second- and third-tier brands such as Gold Ingot and Hujihua to compete with competing brands on the market in price. Under such a brand strategy, Arawana, as the core brand of Kerry Oils & Grains, is supported and protected by other brands. In past edible oil price wars, Arawana's price has remained strong, thanks to the other brands of Kerry Oils & Grains cheering from the sidelines. When others cut prices, Kerry Oils & Grains' other brands cut even more. A series of price cuts left competitors powerless, while Arawana stayed away from the price competition turmoil. 2.3 Competitive Brands Closely Follow Competitors Just as Arawana and Fulinmen were fighting to the death, Luhua, which had been content with its position in the Shandong Peninsula, raised the banner of revolution against the industry leader Arawana. Luhua "created" the concept of "extra-fragrant peanut oil." Because the national standard for peanut oil only has three grades: second-grade oil, first-grade oil, and strong fragrance. Luhua claimed that the "Luhua peanut oil" revolution filled the gap in Chinese edible oil, and also proposed that peanut oil has nutritional and health functions. Luhua determined to firmly play the "health" brand and advocate the concept of green consumption. After years of concentrated publicity on CCTV and in newspapers and other media, Luhua's brand and image have been established. The "Didi Luhua fragrance wafts to thousands of homes" after every news broadcast is a manifestation of Laiyang Luhua's civilian strategy. In Beijing, peanut oil has gradually become fashionable, ranking first for the first time with a high market share of 37.7%, and nearly 51.4% of consumers use peanut oil; in Guangzhou, the southern stronghold and Arawana's home base, Luhua's sales reached 50,000 tons in 2000, and in 2001, this figure doubled. In addition, Luhua's "hand-broken peanut" logo has also become synonymous with high-quality peanut oil in the minds of consumers. Luhua now firmly holds the third position in the packaged edible oil market. Luhua's successful concept marketing eroded large areas of Arawana and Fulinmen's salad oil territory, causing heavy losses for Arawana and Fulinmen, who had neglected the peanut oil market. To maintain Arawana's market position and avoid involving Arawana in endless peanut oil competition with Luhua, Kerry Oils & Grains launched its professional peanut oil brand Hujihua, hoping to adopt the same strategy as Luhua, disrupt Luhua's market competition against Arawana, and compete for Luhua's market. This approach of launching brands similar to competitors, turning passivity into initiative, can both protect the core brand's market and seize the competitor's market. Although Hujihua's market performance is not outstanding, it has played a role that directly using Arawana to compete with Luhua could not achieve. 2.4 New Brands to Open New Markets New markets are unpredictable, and entering a new market directly with the core brand carries risks. Arawana's approach is to launch new brands to open new markets, and then enter with the Arawana brand when market conditions mature. The launches of the "Gold Ingot" brand into the soybean oil market and the "Carp" brand into the rapeseed oil market were both based on this consideration. Of course, for such a strategy to succeed, strong strength must be guaranteed, including industry expert technology, a complete sales network, and superior brand advantages. Only then can new brands be smoothly promoted, and when conditions mature, Arawana can be positioned as a high-end product, interacting with existing brands to form an overall advantage.
  4. Channel Management, Double-Edged Sword Production bases covering the whole country, a dealer team of more than 2,000, and exemplary direct sales teams not only reduce the enterprise's transportation and procurement costs but also greatly enhance the enterprise's visibility in China. 3.1 Intensive Urban and Rural Sales Network, Establishing Stable Distributor Relationships China has a vast territory, and it is no easy task to sell goods to every region. To get urban and rural residents to give up bulk oil and switch to safe, hygienic, nutritionally balanced packaged edible oil, Kerry Oils & Grains relies on production bases covering the whole country (including Shanghai, Beijing, Shenzhen, Guangzhou, Tianjin, Qingdao, Qinhuangdao, Harbin, Yueyang, Shijiazhuang, Dongguan, Wuhan, Yueyang, Xi'an, Chengdu, Quanzhou, Zhangjiagang, Taizhou, Yancheng, Zhoukou, Fujin in Heilongjiang, Jiamusi, Changji in Xinjiang, Aksu, Boxing in Shandong, Yanzhou, Chongqing, Anhui, Xianyang in Shaanxi, etc.) and marketing networks to effectively penetrate products to the grassroots. Around 1994, there were not many regional strong distributors available for Kerry Oils & Grains to choose from, and their strength and management levels were uneven. Kerry Oils & Grains quickly responded by implementing a "monogamy" system for regional agency, that is, establishing a first-level exclusive agent in one city, thereby quickly establishing stable cooperative relationships. This regional exclusive agency cooperation model is not based purely on interests, nor is it an unstable structure that changes with policies or market changes, but a long-term, stable strategic partnership built on integrity. Years of honest management have won Kerry Oils & Grains many loyal partners. To this day, many of Kerry Oils & Grains' agency partners are the first batch of agents from more than ten years ago. Both sides develop together, forming a strategic partnership of sharing weal and woe between production and sales. Such a stable distributor team has played an indelible role in both network coverage and the continuity of product sales, something that most enterprises in the grain and oil industry still cannot achieve. Currently, the number of Kerry Oils & Grains' distributors has exceeded 2,000. Among them, the first-level network covers 350 large, medium, and small cities nationwide (including Hong Kong and Macau), the second-level network covers almost all cities above the county level, and the coastal market channels are refined to the sales network of townships and villages. Even in Tibet, "Arawana" can be seen. In terms of channel refinement in China's food industry today, Arawana is undoubtedly a leader. In 1998, Kerry Oils & Grains ended the history of each production base independently responsible for its own product sales, and established Kerry Oils & Grains Business Development (Shenzhen) Co., Ltd. to carry out work on brand building and resource integration, sales network construction, and company profitability. At the same time, Kerry Oils & Grains has established long-term friendly cooperative relationships with international large retail enterprises such as Walmart, Carrefour, and Metro. It conducts in-depth research on key retail customers, manages them professionally according to their characteristics, fully utilizes the window advantages of stores, timely and accurately grasps changes in consumer demand, and conveys the health concept consistently advocated by "Arawana" to consumers. The huge and detailed marketing network not only ensures the quality and safety of edible oil products but also gives Kerry Oils & Grains the largest group of packaged edible oil production enterprises and the largest-selling brand in China. Currently, the overall national consumption rate of packaged edible oil in China is less than 20%. Of this consumption, 90% is concentrated in central cities, and the rural market still has amazing development space. In the past two years, Kerry Oils & Grains has begun to focus on promoting packaged edible oil to the rural market, thereby further increasing sales. Kerry has accumulated relatively rich marketing experience in some rural markets in China in the past. The overall approach is: use relatively mature products, rely on the strength of partners for product penetration, and combine with appropriate promotional activities to popularize healthy edible oil consumption habits in rural areas. At present, the "Arawana" family's "chorus" has just begun. In the next two years, Kerry Oils & Grains will focus on developing the rural market, hoping to use relatively mature products and the strength of distributors to fully enter the rural market. 3.2 Establishment of Group Direct Sales Team With the deepening of China's reform and opening up policy and the continuous improvement of people's living standards, foreign enterprises and large domestic enterprises have increased their investment in the retail industry. In the past decade or so, China's retail industry has developed greatly and has shown a trend from traditional wholesale and small farmers' markets to large stores (Key Accounts, or KA) that are professional and one-stop shopping. For example: Walmart in the United States, Carrefour in France, ParknShop and Vanguard in China, Nonggongshang, etc. According to data, large stores in China's retail industry are growing at a rate of 20% per year, gradually showing a "big fish eat small fish" situation in competition. KA stores are playing an increasingly important role in the entire retail industry, especially for large foreign enterprises like Kerry Oils & Grains. For manufacturers, KA stores are not only an important window for brand communication but also a guarantee of market sales. In view of this, Kerry Oils & Grains considered on the one hand whether serving this customer through distributors would be adequate in terms of capital or management. On the other hand, it considered the overall layout issue (completely handing over the entire market to distributors would, to some extent, constrain the manufacturer's future development). After repeated research, in 2005, it established a direct sales department in key cities nationwide, fully responsible for the management and operation of the urban KA system, playing an indelible role in the future development of the enterprise, and also serving as a model for distributors in brand guidance.
  5. Promotion 4.1 Focus on Basic Work Strengthen deep distribution. The concept of deep distribution is a marketing method widely adopted by many modern large enterprises. Industries such as beverages and cigarettes do this very well. For example, you can buy cola, bottled water, cigarettes, etc. in stores in any city or village in China, but you may not necessarily buy oil in these places. This is where deep distribution needs to be strengthened. Some people say that the only channel to buy oil is in the grain and oil industry. Is that really so? Then do fruit wholesale, aquatic product wholesale, vegetable wholesale, beverage wholesale... these channels help with the sales of edible oil? This is indeed worth thinking about. When there are no clever methods, you should use down-to-earth local methods to do it, strive to improve the store coverage rate, which is as important as market share. According to the 20/80 principle (20% of key customers return 80% of market sales, while the remaining 80% of customers contribute only 20% of sales), the enterprise focuses on cultivating customers that increase production and pull the brand. Compared with other customers, the cultivation intensity is far greater, whether in terms of resource allocation tendency or work follow-up. In daily basic work, the company requires each office and each customer representative to do "intensive cultivation" for each sales point: 1. Among the many brands, give priority to displaying the Arawana series. 2. Daily visits are arranged according to: key, secondary, to non-key, with time tilted, and do a good job of "purchase, sales, and inventory" of the enterprise's products in customer accounts. 3. Check the effectiveness of activity implementation. 4. On-site guidance and training for promoters. 5. Collection of competitive brand information. 6. Use company resources to promote product sales, carry out theme activities... Strategically, the enterprise walks on two legs: first, the air strategy—strengthen brand promotion in the media. Second, the ground strategy—coordinate with the air strategy to do terminal promotion support (image stack display, store DM, and off-site activities) and channel network expansion... 4.2 Green Marketing Through sponsorship, brand communication close to life Example 1: Inviting the famous Chinese culinary master—Mr. Martin Yan—to visit Kerry Oils & Grains (Note: Mr. Martin Yan is a world-renowned Chinese culinary master and TV cooking show host. He has hosted more than 2,000 episodes of cooking programs and published more than 26 cookbooks. He is known as the "Culinary Missionary." In 2005, Mr. Yan returned to China to shoot his first Chinese-language cooking show, "Yan Can Cook: The Chinese Kitchen," which combines travel, food, and entertainment, with 52 episodes per year, broadcast on 25 provincial TV channels and some regional channels, one episode per week.) "Arawana" peanut oil, as the only designated oil for the program, will sponsor "Yan Can Cook: The Chinese Kitchen" throughout the year, bringing deliciousness and health to thousands of households in China together with Mr. Yan. Example 2: Olivoilà olive oil joined hands with "Trends Health" to successfully create the first 10,000-person weight loss competition, "2008 Olivoilà Olive Oil Fashion Health Weight Loss Competition and Thousand-Person Bikini Party," grandly held in Yalong Bay, Sanya, Hainan. The event advocated healthy, smart, and happy weight loss principles, hired professional fitness coaches, nutrition experts, and weight loss consultants to give the public professional health weight loss guidance, allowing people who pursue fashion and health to find a healthy lifestyle in the process of scientific weight loss. Example 3: As the exclusive edible oil supplier for the Beijing 2008 Olympic Games, during the Beijing Olympics, Arawana provided more than 513,000 servings of oil for the Beijing Olympic Games healthy meals to more than 10,708 Olympic athletes from over 200 countries and regions. At the same time, Arawana has always provided edible oil of the same quality as that supplied to the Beijing Olympics to society, "sharing world-class quality with 1.3 billion people and with Olympic champions." For this plan, the Arawana Olympic production enterprise open day plan, the Arawana "Walk to Enjoy the Olympics, Health for 1.3 Billion" 10,000-person walking event, and the Arawana "Olympics Make Cities Wonderful" central media tour interview group activities were grandly held. Through these activities, the commitment of "letting 1.3 billion people share Arawana's world-class quality" was fulfilled. For more than 10 years, Arawana's business philosophy has always adhered to "not seeking profit, only seeking promotion, popularizing health, and building a big brand." At the same time, Arawana not only invested a large amount of TV and newspaper advertising to publicize edible oil knowledge, bringing people more and more scientific oil use knowledge, but also actively participated in the government's promotion of "safe oil," comprehensively promoting the development of the nation toward healthy edible oil. It effectively promoted the "safe oil" campaign, cracked down on inferior oil, avoided people being harmed by toxic oil, and protected people's health. This shaped Arawana's image as an "edible oil expert" and enhanced brand value. "Arawana" has invested nearly 500 million yuan in publicity over 10 years, striving to change Chinese people's consumption habits and actively advocating hygienic and healthy cooking methods. It is the true advocate and pioneer of China's packaged edible oil. Perhaps we can say without exaggeration that it is the core brand value of "health" that made the Arawana brand successful, and it is the overall high quality and high credibility of the enterprise under the brand that won the market for Arawana. As the earliest disseminator of the concept of China's packaged edible oil, Arawana edible oil not only completed the enlightenment education of packaged edible oil for people, but also changed a generation's oil use concept with its development, making packaged oil begin to enter thousands of households. (3) Human Resource Management and External Public Relations
  6. Talent Training Using people to their full potential, making the best use of talents, caring for employees, motivating employees, and improving employees are the basic principles of Kerry Oils & Grains in cultivating talents, and also the foundation of the company's development and success. Now, Kerry Oils & Grains has established a complete set of human resource management systems, regulating employee behavior from recruitment, training, onboarding, and further education, providing ample opportunities for development and room for growth. Adhering to the management philosophy of valuing talent, Kerry Oils & Grains is committed to organizational construction and employee development. Especially in the past two years, it has paid more attention to human resource management and regards it as the fundamental factor for the company's sustainable development. This includes establishing a scientific human resource management system, a complete employee security system, the implementation of human resource improvement projects, talent development plans, providing growth opportunities for employees (pyramid college student development plan, key employee development), and a complete training system.
  7. Crisis Public Relations—Actively Responding to Crises and Daring to Assume Social Responsibility On December 27, 2004, the Ministry of Health's official website published the "2004 National Health Supervision and Sampling Inspection Bulletin on Vegetable Oil." On the same day, media such as the Beijing Times, Beijing Youth Daily, and Beijing Entertainment News rushed to report the Ministry of Health's bulletin. Arawana, Fulinmen, and Jinxiang, three major edible oil brands, were branded as "problem oil" and put on the blacklist. Public opinion quickly spread across the country. At that time, it was the sales peak before New Year's Day, and stores across the country successively saw merchants remove Arawana products from shelves. 2.1 Transparent or Not Transparent A crisis almost completely destroyed the national brand Junkang Calcium, and another rare crisis hit the food industry giant Kerry Oils & Grains head-on. At that time, there were only two choices for the enterprise: refuse transparency or accept transparency. Kerry Oils & Grains clearly chose to reject the former: On the second day after the crisis broke out, Kerry Oils & Grains began to actively respond to the edible oil incident—the enterprise responded through the media to explain the reasons for the inspection problem and provide channels for consumers to consult: First, the problem oil was a regional issue, not a national issue; it was only sold in the Northeast; Second, it was a problem with a single oil type, soybean salad oil, not a problem with the overall Arawana brand; Third, it was a problem with a single specification, not multiple specifications, with special emphasis on 900ml soybean salad oil; Fourth, it was a product grade issue, not a health and safety issue: citing the national standard, an acid value of 0.5 is completely within the healthy range for edible oil; Fifth, experts had been dispatched to communicate with the Ministry of Health and to go to the incident site to understand the situation; Sixth, it was decided to recall the batch of products before the facts were clarified; Seventh, a consumer consultation hotline was announced; 2.2 Credibility or Interests To ensure business credibility, the enterprise organized all branches nationwide in a short time to actively cooperate with media interviews and Ministry of Health inspections, disclosing information to consumers every day based on changes in information. First, it published information in the form of advertisements that all Arawana products nationwide had passed sampling inspections; Second, on the 30th, it held a press conference in Beijing to announce and disclose the product recall situation and product sampling inspection situation over the past two days; Third, it submitted a request for re-inspection to the Ministry of Health. In summary, the enterprise actively and proactively explained the whole incident and disclosed the progress of the matter in a short time until all enterprise products passed inspection. To a certain extent, this not only reduced the impact of the crisis on the enterprise but also resolved consumers' concerns.
  8. Giving Back to Society 3.1 Deep Affection for China, Continuously Increasing Investment in China 2005 was a fruitful year in the development process of Kerry Oils & Grains, which owns the golden brand Arawana. In this year, Kerry Oils & Grains' cumulative investment in the domestic grain and oil industry exceeded the 5 billion yuan mark, basically completing the layout of grain and oil production bases in China, with "Shenzhen Nanhai Oil, Shanghai Kerry, and Tianjin Kerry" as the three national flagship bases, and establishing 40 large grain and oil production enterprises nationwide in Shenzhen, Fangchenggang, Shanghai, Qingdao, Yingkou, Chengdu, Xi'an, and Tianjin. Because it is quite optimistic about the Chinese market, Kerry Oils & Grains has launched a series of operations in China in addition to packaged oil. In 2004, Tianjin Kerry Oils & Grains Industrial Co., Ltd. officially started production. Another important business of the company outside the packaged oil field is specialty oils and fats, including the supply of oil for bread, biscuits, and other products. On March 28, 2005, a large oil processing and oleochemical production base with an initial investment of 100 million US dollars and an output of 100,000 tons was officially opened in Gaodong, Shanghai. This marked Kerry Oils & Grains' progress toward diversified development in the oil field, including refined oil, specialty oil production, and fine chemical industries. In Kerry Oils & Grains' plan, the short-term development goal is to integrate resources, establish production centers with Shenzhen, Shanghai, and Tianjin as flagships, and at the same time convert other local factories into service-oriented regional production bases. There are four main development directions: first, effectively integrate international resources, continuously develop products suitable for Chinese consumers, and achieve the basic goal of serving the public; second, continue to expand the high-end oil market in central cities to meet people's higher-level needs for health and nutrition; at the same time, continuously increase the development of second-tier markets, tirelessly promoting clean, convenient, and healthy packaged oil to consumers; third, increase the development of specialty oils and fats, deeply serving the catering and food enterprises. Fourth, continuously strengthen in-depth research on grain and oil processing and its extended products, and strive to become an excellent grain and oil food group. 3.2 Assuming Social Responsibility Has Only a Starting Point, No Endpoint From the first day of stepping onto this hot land of China, Kerry Oils & Grains has inherited the commitment of founder Mr. Robert Kuok to "be enthusiastic about public welfare and benefit the hometown," and has been carefully creating the "warm family of Arawana," committed to becoming a good corporate citizen of the country and the community. While continuously seeking to make the enterprise bigger and stronger, it participates in various public welfare and charity actions, assumes social responsibility, and benefits the community. At the same time, adhering to the core values of "upholding integrity, focusing on performance, pursuing excellence, shouldering the mission, and valuing talent," Kerry Oils & Grains has long insisted on establishing and maintaining business integrity, committed to guiding healthy consumption trends and cultivating local talents, and earnestly fulfilling the social responsibilities of a corporate citizen. In 1994, when Kerry Oils & Grains' business in China had just gotten on track, it generously donated more than 1.3 million yuan in relief funds and education funds, and organized employees to actively participate in disaster relief donations and material donations. In 1998, at the critical moment when the Yangtze River basin and the Songhua River basin suffered severe floods, the company donated more than 200,000 yuan in cash and materials. On May 11, 2003, on the occasion of China's Nurses' Day, Kerry Oils & Grains Business Development (Shenzhen) Co., Ltd. donated 1 million yuan in cash to relevant departments to fund the purchase of isolation protective clothing and nutritional products for medical staff on the front line of the fight against SARS. In January 2004, Yihai Kerry donated more than 50 million yuan to the China Youth Development Foundation to establish the "Kerry Oils & Grains China Public Welfare Fund." By early 2007, it had cumulatively funded more than 50,000 children of migrant workers, more than 1,000 poor high school students in the western region, and more than 1,500 poor college students to continue their studies. At the end of 2007, when the south suffered severe snow disasters, Yihai Kerry immediately donated packaged oil urgently needed by the disaster area, with a total value of 2 million yuan. At the same time, Kerry Oils & Grains also provided donations to the public security fund, the rescue and bravery fund, and cooperated with Jiangnan University to establish the "Kerry Teaching Scholarship." Every Mid-Autumn Festival, the company also carries out activities to show love to children's welfare homes in many cities across the country. Not long ago, Li Fuguan, Managing Director of Kerry Oils & Grains (China) Co., Ltd., signed an agreement with the China Youth Development Foundation, personally donating 210,000 yuan to build a primary school and a Hope Project library in a remote mountainous area in Sichuan. On May 12, 2008, when an 8.0-magnitude earthquake occurred in Wenchuan, Sichuan, Yihai Kerry founder Robert Kuok and group chairman Kuok Khoon Hong immediately donated 20 million yuan to the China Charity Federation, donated edible oil urgently needed by the disaster area with a total value of 2.6 million yuan, and employees donated nearly 2 million yuan. III. Summary of Kerry Oils & Grains' Success At the beginning of the reform and opening up, China's economy could be described as "everything waiting to be revitalized." It was precisely because Kerry Oils & Grains' leaders had far-sighted vision that the enterprise could achieve its current strength. By boarding the express train of reform and opening up, it laid the foundation for the enterprise's future development. Investment and factory establishment in coastal areas and the government's strong support created favorable development conditions for the enterprise. In the late 1980s, the market was flooded with mixed oils, and products were confused. Kerry Oils & Grains' leaders saw this huge business opportunity and began to invest in China's grain and oil industry, actively building brands and spreading health. In just over ten years, they achieved the result of being number one for several years. In cultivating brands and planning the market, the enterprise actively introduced modern production and management, and made great efforts in product design, concept marketing, and technological innovation. In production, the enterprise advocates the principles of economy, environmental protection, and recycling, greatly reducing the production cost of enterprise products and environmental pollution, and improving the market competitiveness of products from every detail. In sales management, it artificially creates competition among brands to cultivate their respective competitiveness. In a sense, it invisibly raises the threshold for various brands of oil in the market, ensuring that Kerry Oils & Grains products remain invincible in the industry. When the enterprise became big and achieved economic benefits, Kerry Oils & Grains did not forget the social responsibilities of a corporate citizen. It actively gives back to society, increases investment in China, creates more employment opportunities for China, establishes welfare fund institutions, and helps disadvantaged groups and disaster area reconstruction. It is these efforts and returns that have created today's "Kerry Oils & Grains." As the earliest disseminator of the concept of China's packaged edible oil, for more than ten years, Kerry Oils & Grains has not only completed people's enlightenment education on packaged edible oil, but also changed Chinese people's oil use concepts, making packaged oil begin to enter thousands of households. Moreover, with the concept of "Arawana's big family" deeply rooted in people's hearts, "Arawana" has transcended the simple brand concept and gradually formed its own cultural characteristics. Along with the new concept of "Healthy Life, Arawana," it has taken deep root in China's big market. Speaking of China's specialty oils and fats market, the first thing that comes to mind may be Yihai Kerry under Wilmar International, which firmly holds the top position in China's specialty oils and fats market with annual sales of nearly 400,000 tons. However, in recent years, the market situation has been quietly undergoing some changes, and even within Yihai Kerry, there are undercurrents. All this shows that under Yihai Kerry's monopoly, market opportunities are also emerging one after another. So, where exactly are the opportunities in China's specialty oils and fats market? Let's see what the market leader has left for us:
  9. Yihai Kerry's management and innovation level is on the decline. Don't look at the public financial data, saying how much profit Yihai Kerry or Wilmar International has made. Those data are real, but they are earned by Wilmar International in the international market through trade, futures, etc., and have little to do with the domestic specialty oil business. Why? Let's talk about the data: is it a lot for a company with annual revenue of 4 billion to earn 200 million? That's only a 5% profit margin, which is a very dangerous profit indicator. But in Yihai Kerry, this profit margin is used as a shiny number to show off performance.
  10. Product aging is serious. Among the products currently sold by Yihai Kerry, which one is not a mature product that was already on the market as early as 2005 or 2006? After so many years, without continuous support from new products, it has been living on its laurels, so the end of growth is not far away. However, they are not unaware of this problem; it's just that everyone is very busy, really busy, so they don't have time to develop new product series. The so-called new products are just improvements on certain indicators of some original products. If this situation continues, within at most 5 years, Yihai Kerry's market position will fall to second place.
  11. Lack of unity. The current specialty oil business of Yihai Kerry is divided into four major regions, supplied by 5 factories. Under this division, each region will have its own calculations. On the surface, there are systems and regulations, but in reality, incidents of undermining each other between regions are common. As the saying goes, when people are united, Mount Tai can be moved. But now that people are not united, even a dirt pile cannot be moved. So Yihai Kerry has no way to deal with competition from a small trader; it can only watch the market being eroded and customers being snatched away. The only thing it can do is not let the boss know that the market has been lost. The above three points are just the three more serious problems. Many detailed problems are not even worth mentioning. So the opportunities in China's specialty oils and fats market are very large. So where exactly are the opportunities?
  12. High-end products. Although Yihai Kerry has large sales, it basically has no high-end products with technical content. Currently, well-known baking oils and fats and candy chocolate oils and fats in the market can guarantee a profit margin of 20-30% for international brand products. Yihai Kerry has wanted to do such products for many years, but after so many years, it is still in the project demonstration stage. So a large amount of space in this type of oil market has been left to latecomers. This is also why people like Wu Xiangfei, who left Yihai Kerry, were able to stand firm in such a short time by acting as agents for imported products, and then quickly build their own factories.
  13. Product portfolio. As food ingredient oil products, the competitiveness of a single product is far less than that of a product series combination. Therefore, Yihai Kerry wanted to horizontally enter other fields of food ingredients many years ago, but it was just talk and see, year after year passed, and everyone still lived in their own oil world. It is precisely their distributors who, in addition to oil products, also act as agents for many other food ingredient businesses, and their business development and growth rate are better than Yihai Kerry itself. Many other food ingredients and additives are precisely high-profit products, so they can treat Yihai Kerry's specialty oils as a product that does not make money but can win customer trust. After all, Yihai Kerry's market scale and industry influence cannot be underestimated, and they will send a huge market support team to maintain customers for free.
  14. Marketing model innovation. Yihai Kerry's development has gone through many different stages, but the high-profit growth since 2007 is inseparable from the marketing model of procurement and sales linkage created by Wu Xiangfei at that time. But now such a model has become common in the market. Everyone knows how to operate the low-position lock-in sales model, so Yihai Kerry's competitiveness has naturally declined. The market is developing, and innovations in marketing models will continue to emerge. If a marketing model more suitable for the market than procurement and sales linkage can be created, then it will naturally be more competitive in the price of trade products that Yihai Kerry is best at, and replacing Yihai Kerry will not be a difficult task. Editor's PS: The editor has selected 1,067 featured articles from nearly 1,900 articles published on this official account, divided them into 14 categories and 57 knowledge points, and systematically made frontline marketing management content into a library for everyone to learn. From market to customer, talking about actual combat and management, all are dry goods. Follow the official account, reply with the number "1" to browse and view related content.