Before discussing how strong brands defend their dominance, one must deeply understand what they are defending and its significance and value.
Core Reading:
What is a strong brand?
How do strong brands defend their "territory"?
How did Nongfu Spring adjust its dealers to counter competitors?
-01- I. Basic Concepts of Strong Brands A brand is the "brand" of a product (the word brand originates from Old Norse, meaning to burn). Brand marketing is the mainstream of 21st-century marketing. But strictly speaking, there are no good or bad brands in the market; only strong and weak brands. If a brand is a projection of a company's products, symbols, and corporate strength in consumers' minds, then this projection can be exaggerated or diminished, and consumers' impressions can be clear or vague, thus giving rise to strong and weak brands.
II. Several Advantages of Strong Brands: 1. Consistent Good Quality From the perspective of use value, brands and products have unity. A brand often represents a specific product it serves. In this case, product quality is directly related to the brand. Strong brands naturally possess strong quality and maintain it forever.
2. Emotional Attachment A strong brand must be attractive, giving people joy, trust, and satisfaction. Thus, creating brand affinity is extremely important. People's emotional attachment to a brand often stems from the rich connotations the brand itself possesses. Brand image, brand culture, brand personality, and brand symbolism attract people's affection. Awareness is a characteristic of strong brands, but high awareness does not necessarily lead to affection. For example, "snakes" and "cats" are both highly recognized animals, but why do you only like cats?
3. Distinctiveness: Distinctiveness Makes It Memorable Distinctive products and services are always the goals that strong brands pursue. We can find that the products served by strong brands are truly unique; they constantly create a feeling of "being different." Distinctive marketing is differentiated marketing. A brand's distinctiveness should be based on the distinctiveness of its products or services. Distinctive products and services provide the "embryo" for building a distinctive brand.
-02- Marketing is War: How Do Strong Brands Fight Defensive Battles? My personal view is to consider the following three aspects.
I. Only Market Leaders Should Consider Defense (Leaders should be established in customers' minds) Most companies build their leadership on concepts they create themselves. Companies cannot make themselves leaders; only customers can do that. The leader recognized by customers is the true leader.
II. The Best Defense Strategy Is the Courage to Attack Oneself (Attack yourself): Since the defender is in a leading position, it holds an advantage in customers' minds. The best way for the defender to improve its position is to constantly challenge the beliefs in customers' minds. In other words, it must continuously introduce new products and services to replace existing ones, thereby consolidating its position.
III. Always Be Ready to Block Competitors' Strong Marketing Offensives (Be vigilant in peace, prepare for danger) Most companies have only one chance to win, but market leaders have two. If the leader misses the chance to challenge itself, it can still copy other companies' competitive tactics. However, the leader must act quickly to block the attacker before it establishes its position. For the leader, blocking is very effective, determined by the nature of the battlefield, because the battle is fought in customers' minds. For the attacker, it takes time to leave an impression in customers' minds; generally, this time is sufficient for the leader.
-03- For example, in "The Art of War" (Sun Tzu), it says: "Know yourself and know your enemy, and you will never be defeated; know yourself but not the enemy, and you will have one victory and one defeat; know neither yourself nor the enemy, and you will be defeated in every battle." Around 2014, Nongfu Spring was already the number one brand in drinking water. At that time, the company clearly recognized its three types of market forms: The first type is areas where channel intensive cultivation is fully realized; the second type is areas where channel intensive cultivation is realized in urban areas but not yet in suburban townships; the third type is third-tier areas that are not effectively controlled. The latter two types were bottlenecks for Nongfu Spring's development and also attack points for competitors' strong marketing offensives. At that time, Nongfu Spring's leader, Zhong Shanshan, after several months of in-depth visits to frontline markets, proposed new market requirements:
- Employees seemed hardworking and doing things, and urban areas were okay, but overall market share was declining? The key issue was still the layout of third-tier cities, and the key was the dealer structure problem. In urban areas, Coca-Cola was relatively strong; Coca-Cola emphasized control and intensive cultivation in urban channels, while Pepsi was strong in peripheral areas, doing channels, wholesale, and promotions one after another. We need to think about how dealers in the two cola regions should operate.
- It was required that regional managers lead teams to visit the lowest-level areas or counties to visit Pepsi or Coca-Cola dealers, compare situations, and focus on dealer information: First, look at dealer sales volume, i.e., capability; second, look at equipment, vehicle delivery capability; third, look at region and customer relationships, i.e., customer control capability and number of outlets; fourth, management capability, warehouse management, and financial capability.
- It was required that regional managers bring practical research data to meetings, especially statistics on: regional population base, per capita consumption, dealer years, warehouse cleanliness, comparisons, etc.
- At the same time, the company evaluated dealer capabilities. After evaluation, contracts were signed for long terms, with three years as a target. After three years, if dealers could keep up with the company's growth, follow policies, and not engage in channel stuffing, and if our products accounted for 40% or more of their sales volume, these dealers' contracts would be automatically renewed.
-04- Having discovered its own problems and competitors' advantages, Nongfu Spring made a decisive move. At the "Red Movement China" conference that year, it proposed redefining and strategizing national dealers as follows:
A. Special Dealers Definition:
The service area is mainly intensive cultivation markets, with company internal sales personnel distribution accounting for more than 50%.
The business formats covered by special dealers are mainly traditional retail stores, with a small mix of KA stores, wholesalers, and special channels.
Orders taken by company sales representatives account for more than 50% of special dealers' sales. The sales rep routes are entirely intensive cultivation routes.
B. Traditional Dealers Definition:
The service area is mainly county and township markets, with several intensive cultivation routes within the area; non-intensive areas are covered by dealer vehicle sales.
The business formats covered by traditional dealers include: traditional retail stores, KA stores, wholesale, and special channels.
The company has sales reps cooperating with traditional dealers. The same sales rep may cover formats including: retail stores, KA stores, wholesale, and special channels; routes may include: intensive cultivation routes, vehicle sales routes, and wholesale routes.
C. Contract Dealers Definition:
The service area is mainly non-intensive cultivation markets in counties and townships, relying on the dealer's own distribution capability, covered by dealer vehicle sales.
The business formats covered by contract dealers include: traditional retail stores, KA stores, wholesale, and special channels.
The company has no sales reps to help sales, but provides customer managers for guidance and management.
D. Contract Requirements for the Three Types of Dealers:
Special dealers: If our sales reps' distribution share is ≥50%, they must sign as special dealers.
Regional contract dealers: Per capita consumption in the covered area must be ≥5 yuan in the first year, 8 yuan in the second year, and 12 yuan in the third year; and the growth rate of per capita consumption in the covered area must be ≥40%. Whether the dealer is among the top three local dealers, and whether the scale is greater than 10 million yuan.
Traditional dealers: Per capita consumption in the covered area must grow by more than 50%. Regional operations directors must fully participate in dealer selection and personally participate in negotiations with some dealers.
This was Nongfu Spring's major reform in 2014. Based on the development and situation of the "war," it formulated battle strategies and integrated market resources to find opportunities for growth. After screening dealers and adjusting the market, it gradually realized the current regional dealer contract system, maximizing dealer capabilities and effectively blocking C'estbon's offensive. Looking back, it was indeed a beautiful defensive battle. Nongfu Spring's strategic layout and tactical coordination perfectly achieved its own goals while suppressing competitor growth. Here, I briefly explain the relationship between strategy and tactics.
Strategy Originates from Tactics:
Strategy should be subordinate to the needs of tactics.
Achieving results is the ultimate purpose and sole goal of strategy.
Strategy should come from the bottom, not from the top.
A true manager can only formulate truly effective strategy after deeply and thoroughly understanding the market situation.
Marketing strategy should develop from the mud of the market bottom, not from the sterile room of an ivory tower.
The great strategic goal is to make all work proceed smoothly at a certain tactical level.
Final Thoughts: My previous article's theme was: "How Weak Brands Achieve Regional Dominance," while this article's theme is: "How Strong Brands Achieve Eternal Dominance." The two are not contradictory. The market can only progress in the long run when "the spear is constantly sharpened and the shield is constantly strengthened." Both articles are market insights from my own experience, practical operations, and theory combined with practice, shared with you. Whether strong or weak, brands are process items. In the rapidly changing market, strong can become weak, and weak can become strong, perhaps just a thought away. As marketers, we only need to continuously learn, summarize, practice, then learn again, summarize again, and practice again, and we will surely grow together with our products, from weak to strong.
Extended Reading:
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