Author | Liu Chunxiong Source | Teacher Liu's Forum (ID: liuchunxiong1964) Brands seem to no longer have strong appeal, the rise of new brands no longer seems to require long-term huge investment, and the premium power of brands seems no longer so strong. All this is regarded by Teacher Fang Gang as "brand dilution". This statement resonates with me. I have always wanted to express it but couldn't find the right words; Teacher Fang Gang summarized it very well. Indeed, we should examine the social environment of brands. After all, when the environment changes, everything must change. Before discussing brand dilution, let me first take stock of current brand phenomena.

  1. Brands at the Bottom of the Pyramid Chinese brands face bigger problems because they are all brands at the bottom of the pyramid. "The Fortune at the Bottom of the Pyramid" is a famous work by renowned American expert C.K. Prahalad. Looking at its subtitle, "Innovative Business Models for Serving the Poor," it is clear that by serving consumers that multinational corporations disdain—the poor—not only low-income consumers in China but also low-income consumers worldwide, Chinese enterprises have gained astonishing wealth. Chinese brands were established precisely while capturing wealth at the bottom of the pyramid. Teacher Jin Huanmin once gave two criteria for brands: at the same price, sell more than others; with the same product, sell at a higher price than others. The first type is a "well-known brand," and the second is a "well-known brand with premium power." Undoubtedly, Chinese brands basically belong to the first category. Even brands now well-known globally, such as Huawei, still have limited premium power. In comparison, Western developed countries are mainly middle-class, and mainstream brands also serve the middle class. These brands have premium power. When multinational brands enter China, they are often more expensive than in Western countries, showing how strong their premium power is. China is also entering a middle-class society, products are upgrading, and enterprises are undergoing structural adjustment. Some Chinese brands have not yet "entered the city," such as Wahaha. Even brands that have entered the city have long been marked with the "bottom of the pyramid" imprint. Can these brands upgrade during the mainstream shift and product upgrade? I hold serious doubts. Some brands may be able to, but most will find it difficult. In the final analysis, brands at the bottom of the pyramid are transitional brands.
  2. Brand Similarity Not only Chinese brands face difficulties; multinational brands also encountered even bigger problems much earlier. ▍ Difficulty One: Brand Similarity A quote from Kotler's "Marketing Management" (2000 edition): "A few years ago, consumers saw brands arranged in a brand ladder according to product catalogs, with preferred brands at the top, descending in order. Now this ladder in stores is disappearing, giving way to consumer perception of brand similarity. That is, many brands are similar, and consumers will accept any acceptable brand." In simple terms, existing brands are all similar; they are more or less the same. Since they are similar, the premium power of brands is greatly reduced. ▍Difficulty Two: Multinational Companies' Global "Undifferentiated Brand Strategy" Fails What is an "undifferentiated brand strategy"? It means no matter how different consumers are, I sell in my own way. Of course, it wouldn't be said so bluntly, but the practice is essentially that. If you don't believe it, look at multinational brands in Africa; they are not sold cheaply. In China, they are more expensive than in developed countries. Some underdeveloped small countries lack manufacturing capabilities, so no matter how expensive, they have to buy. It is precisely this undifferentiated brand strategy that gave Chinese brands the opportunity to go global. Although entering developed countries is difficult, entering underdeveloped countries is relatively easy.
  3. Internetization of Brand Tone Even well-known multinational brands like P&G and McDonald's now seem outdated. These brands were once considered fashionable. In China, they were even brands to be looked up to. These long-established brands seem to have lost their charm in front of new consumers. This includes not only consumers in developed countries but also Chinese consumers. For Chinese consumers, apart from certain symbolic brands such as luxury goods and Apple, they generally no longer look up to multinational brands. Even Apple is losing ground in China. The reason for brand aging, besides the rise of consumer segments like China, is mainly the rise of the Internet generation of new consumers. They instinctively resent brands built through traditional means. It can even be said that in the future, the more you try to build a brand through traditional communication methods, the more the brand will seem out of touch with the times.
  4. Internet Brands In the current world "TOP 100" brands, the top positions are mostly occupied by Internet brands, such as Facebook, Amazon, Huawei, Alibaba, etc. These Internet brands are mostly not the result of traditional communication, nor are they the result of deliberate "brand building." Their rise is the result of consumers' spontaneous dissemination. The mode of dissemination is UGC (User Generated Content). They are welcomed by consumers first because they are good products themselves. In the Internet era, good products bring their own traffic. Internet brands, such as Xiaomi, have risen in a completely different way from traditional brands. It is not through long-term sustained investment, but through Internet ignition. Internet ignition must trigger a certain dissemination mechanism. For example, almost every day several news items ignite, but it is not the ignition of dissemination; it is spontaneous dissemination after triggering a certain touchpoint. However, what this trigger mechanism is has not yet been mastered.
  5. Brand Platformization Now Chinese enterprises are undergoing structural adjustment and mainstream shift. For example, dairy products, beverages, instant food, etc. These enterprises have adopted almost similar brand strategies during the mainstream shift. Original brands, such as Uni-President and Yili, have become public platforms. On the one hand, they have been marked with the imprint of the times and have limitations of the times, making them unsuitable for product upgrades; on the other hand, they still have certain influence and can provide endorsement. As a result, the brand structure within enterprises has changed. Original brands have become public platforms, and some call this the platformization of 'brands'. New products adopt entirely new sub-brands. For example, Yili's new products use the Ambrosial brand, resulting in the phenomenon of "main brand fading, sub-brand becoming the main brand." This phenomenon may be mainstream for a considerable period.
  6. Brand Dilution Brand dilution means different things to different people. Here is my understanding: ■First, the "quality assurance" function of brands is fading The primary function of a brand is "verified quality assurance." In a society where quality is not safe, "quality assurance" is indeed very important. Western countries basically no longer have such problems (occasionally they do). In China's manufactured goods sector, this problem is no longer that serious. Exceptions are non-manufactured goods, such as agricultural products, front-store-back-factory products, and products from street stalls. ■Second, brand value is no longer scarce, and there is no longer excessive admiration for multinational brands Brands are spiritual admiration. Chinese consumers once admired all brands originating from the West. With China's development, this has shifted from admiration to equality, and even to looking down (such as Internet brands). The change in perspective is also a change in the sense of brand value. Brands once admired, such as McDonald's and Coca-Cola, are now just everyday brands. When brand value is no longer scarce, the symbolic function of brands weakens. Simply put, people no longer show off with brands. ■Third, the wave of anti-industrial brands is rising, and UGC is replacing SLOGAN In the past, a brand was spending billions to remember a slogan; a brand was the result of strong communication. Such brands are now called industrial brands. Now, brands are the result of UGC (User Generated Content), and consumers are brand communicators. Brands formed by 'product + UGC' are Internet brands. In the future, UGC will crush Slogan. ■Fourth, all 4Ps are communication In the past, brands were the result of communication under certain premises (such as quality). In the Internet era, marketing has reached its highest realm, where all 4Ps are communication. Of course, the concept of brand still exists because a brand is actually the result of all marketing activities. When all 4Ps are communication, then a brand is the result of 4P communication. Look at current Internet brands; it seems they came about this way. We are entering a pan-brand society, where everything left is a brand. We are entering a society where brands satisfy the self, not social functions. We are entering a society where we look at all brands in the world on an equal footing. This is a society where China's economy has developed and consumers' psychology has matured. In such a society, brands no longer have special significance. -END-