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Brand and sales are, in fact, twin sisters. Scale spreads costs, while brand creates profit. As an enterprise, sales are certainly necessary; with sales, the enterprise can operate normally, maintain basic survival, and lay a solid foundation for development.
However, if an enterprise wants to sustain profitability, continuously improve profit levels, and even achieve "thick profits with high sales," it must, while pursuing sales, also focus on brand building and enhancement. Through the two-way interaction between sales and brand, they can promote each other and achieve healthy and sound development.
Neglecting brand while focusing solely on sales can cause an enterprise to suffer from "short-sightedness" and fail to go far.
Qinchijiu, which once won the CCTV "Biao Wang" (top bidder) title twice, leveraged advertising to maximize sales growth. At that time, facing huge sales (exceeding 1 billion yuan), the enterprise did not calmly consider the synchronous relationship between sales and brand enhancement. Instead, it continued to expand scale, cooperating with some Sichuan distilleries to pursue economies of scale. As a result, due to excessive "overdraft" of corporate strength, although it spawned a "China Famous Brand," it ignored the laws of brand building and ultimately failed to cultivate a brand that customers trusted. This led to "rapid rise and rapid fall," and a once "star" enterprise collapsed.
Neglecting sales while overemphasizing brand can also "hurt" the enterprise.
The failure of Wugu Daochang, from a market perspective, is a case of focusing on brand building or consumer education while ignoring sales or revenue. The enterprise's original intention or starting point may have been good: to "disrupt" the instant noodle industry and create a new "non-fried" category. However, it fell into the misconception of trying to build a leading new category or brand in a short time, not realizing that brand building is a long-term process. It requires not only a long-term strategic vision but also corresponding strength, especially subsequent financial support. The enterprise's cash flow, besides external financing channels, also depends on its "hematopoietic" ability—that is, sufficient sales and profits, meaning the internal circulation system can support brand construction or innovation. Otherwise, it is like "pulling up seedlings to help them grow" or "drinking poison to quench thirst."
Analyzing these two cases, Qinchijiu's failure may lie in its excessive pursuit of superficial glory. By winning the "Biao Wang" twice, it achieved explosive sales growth, which is a matter of "tactics." However, in the "way" of brand, it ignored the gradual and long-term nature of brand building, mistakenly believing that the "bombardment" of advertising in the advertising era could bring a strong brand or long-term stability. This was merely the enterprise's wishful thinking.
In fact, a famous brand is not equal to a brand. A famous brand is often a "fast-growing product," while a brand is the result of long-term accumulation. Similarly, an enterprise's visibility and advertising buzz are not equal to a brand; they are only the external forms of brand building. According to brand building theory, the complete connotation of a brand includes at least the following "five degrees":
1. Brand awareness; 2. Brand recognition; 3. Brand trust; 4. Brand reputation; 5. Brand loyalty.
If there is only awareness and recognition, but lacks trust, reputation, and especially customer loyalty, then the brand will be incomplete, leading to phenomena like Qinchijiu's "flash in the pan."
Wugu Daochang's defeat is due to the enterprise being too "advanced," focusing on category or brand guidance while ignoring its own strength, especially the input-output ratio. It only cared about brand, not sales, resulting in a "chain slipping" at a critical moment—lack of follow-up investment, causing "trouble in the backyard." The pioneer became a martyr, and finally was acquired by COFCO, which is very regrettable.
In summary, only doing sales without building brand makes the enterprise short-sighted and difficult to strengthen and expand. Conversely, only focusing on brand without caring about sales makes development like "water without a source, a tree without roots," and unsustainable. Sales and brand complement each other. As sales grow, the brand will be continuously consolidated and enhanced. Similarly, as the brand becomes well-known, especially with increased trust, reputation, and loyalty, the product mix will be optimized, promoting healthy sales growth. At the same time, the enterprise's profitability will strengthen, allowing it to allocate more resources to brand building. Ultimately, the enterprise will form a virtuous cycle, mutually reinforcing each other, and promoting spiral sustainable development.