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Recently, I attended a marketing salon themed "How Traditional Enterprises Reposition Themselves in the Internet Era." Below is the transcript of Jiang Xiaobai's boss Tao Shiquan's speech at the salon.
I used to be a professional manager. In the second half of 2011, I decided to seize the opportunity of new media to create the new brand Jiang Xiaobai. To be honest, even today, we are still a small or medium-sized enterprise, not particularly large.
Our brand Jiang Xiaobai owes a lot to Sina Chongqing. Sina gave us an opportunity; without Sina, there would be no brand. Without Sina, I wouldn't even have had the impulse to start a business. After more than a year of preparation, we launched Jiang Xiaobai in the first half of 2012, and we've been going ever since.
From the Competitive Landscape of the Beer Industry to Brand Positioning:
Let me first talk about a special case: About three years ago, I heard about a Tianhu Beer in Liaoning. Liaoning Tianhu Beer is located in Fushun, right under the nose of Shenyang Snowflake's headquarters. The case of Tianhu Beer is quite shocking (see another article in today's push: Successful Case Study of Beer Enterprise Competitive Strategy). Because Snowflake has been attacking cities and territories in Liaoning for ten consecutive years, dumping at low prices, then negotiating acquisitions. They have enough money; I sell beer at one yuan a bottle, right? I can afford it. I lose 100 million a year; you can't afford that. After a few years, you'll be beaten down, and then we sit down and talk, and I acquire you.
Snowflake Beer used this method to conquer Liaoning, acquiring all the breweries in the entire province. But in the end, they couldn't do anything about Tianhu Beer because Tianhu Beer introduced a fresh beer, a completely different game rule, a new competitive model. So from the background, this positioning is particularly excellent.
The market positioning of our brand Jiang Xiaobai is the same as Tianhu Beer: we do the opposite of the industry giants. Whatever they emphasize, I deliberately don't emphasize. I must be tit-for-tat with them, do the opposite. They talk about long history and old brands; we are young, individual, youthful, and energetic. They talk about being high-end, representing the status, wealth, and identity of certain groups; we represent young people, rebellious, unrestrained, even the "loser" culture. Only by taking a completely opposite angle can there be a gap in the market, so we can gradually develop in that gap. Of course, as we grow bigger, the offensive and defensive advantages will shift.
Before we talk about positioning, we must do research. Some say we need to go to other places to research. I say no, just look at ourselves and the people around us. For the habits of a certain group, you reflect and ponder. Look at my beer consumption: in the first stage, I was a blind consumer. I didn't understand beer. Anywhere I go, there are two choices I like most. For example, when I go to Mount Tai in Shandong, there are two choices for beer: first, big brands. The bigger the brand, the better; I feel safe. For my needs, I'd choose Budweiser or Heineken; I feel safe and assured, but there's nothing special. I can order that anywhere in the world.
Second, individuality. When I go to a place, I always ask the waiter: "What's your local beer?" and try one. As consumers, that's the first stage.
But in Chongqing, Shancheng Beer currently has over 50% market share. In Sichuan, especially Chengdu, Snowflake has 57% market share. Snowflake has become the world's largest single product. The beer industry has very high brand concentration. As a consumer, I have no choice. When I drink in Chongqing, they only offer that, so I have to drink it. I can only drink Snowflake or Shancheng because the store is all Shancheng products. From 1958 to pure draft, several varieties, just sub-brand names, but the beer is the same, selling at 6, 10, 15, 18 yuan, different prices. Then you pick one. It becomes blind consumption: "Come on, pure draft!" You think pure draft is better, even though I know pure draft is just a concept. But when treating guests, you feel that a more expensive one gives a bit of face. Actually, I resist internally.
Now in big cities like Chongqing, many alternative small brands are popping up. For example, recently many friends are posting Taiwan Beer on WeChat Moments and Weibo. We even go to bar streets to find beer bars and order several types: white beer, dark beer, yellow beer. You'll find there's a big user pain point: being dominated by big brands, consumers resist internally. As an ordinary consumer, I also feel quite disgusted and tired of these big brand beers. You rely on basic strength, market channels, and scale advantages to create a competitive advantage, but this advantage doesn't align with consumer needs. Even if you have 50% market share in a place like Chongqing, what does that have to do with me? You sell the same beer body from low to high end. I don't like it from the bottom of my heart. I want to find my individuality. Even if it's a bit more expensive, it doesn't matter. That's the second point.
I have a friend in Chengdu who runs a light bar for over ten years. His bar has nothing but drinking. It refuses to offer all the best-selling brands currently on the market; it doesn't sell Budweiser or Heineken. All its alcohol is imported from abroad, niche brands, German beers, yellow beer, dark beer. It's not cheap, but it sells surprisingly well. So the third point I want to make is: We completely overestimate consumers' sensitivity to price and underestimate the potential for our products to increase in price.
I never think that relying solely on internet thinking and social marketing can establish a competitive advantage. Sina only provided me with a Weibo tool; WeChat is also a tool; advertising is also a tool. The most fundamental thing is our marketing route, where our marketing strategy is going. This marketing strategy doesn't solely include internet marketing; internet marketing is only part of publicity. Although it's important, we can't overestimate its role from the start. Don't rely on a tool to solve strategic problems.
For example, the Kuomintang's route was wrong, so even with planes, cannons, and American equipment, they still lost. The Communist Party's route was right, so with millet plus rifles, we could win. So before doing internet marketing, we must first solve the problems of brand, product, and consumer positioning. These are prerequisite issues; you can't skip them. You need to think through the logic clearly enough, and then when executing, the key is whether our execution is a bit stronger or weaker, investment a bit bigger or smaller—that doesn't matter. But every bit of our investment must be effective. So I think in the internet environment, the first point of the prerequisite is: Is your product sharp enough? Like a needle tip, can it pierce in? Can it be sharper?
This product must meet two conditions to align with internet thinking. First: my internal quality is particularly good, able to surprise people. So when I pour this wine today, "Ah, it's particularly good," but it's just "particularly good." When the obvious difference exceeds your expectations, you'll take out your phone and exclaim, "This wine is really good." Second, what else do you need to do? Your product must look different.
Products are not made for yourself; they are made for posting on Weibo and WeChat, for others to spread. For consumers, does it have value for sharing? Does it have value for secondary dissemination? The first attribute of our product is for consumption; we deliberately create a second attribute: it is meant to be mentioned, shared, spread, discussed, and even to some extent, criticized.
From the product path, in the process of Jiang Xiaobai's social marketing, we simply stand from the consumer's perspective to analyze and think: What would I be interested in? The hardest thing for us as enterprises is empathy, because most enterprises consider their own issues. People are born considering their own issues: What can I get? What resources does my enterprise have? What can I do? I'm a famous trademark; I shout "I'm a famous trademark, I'm a China Time-honored Brand." No one ever considers the other party's feelings. What does that have to do with me? It's not related to consumers. Essentially, the highest level of marketing is to think for the other party.
For example, if you want to do business with me, it's simple: you think for Jiang Xiaobai, you complete the plan for me, tell me how to do it, what effect it will achieve, and I'll just pay. Whether I have resources or influence is not directly related. So from the brand perspective, how do we satisfy the existing, especially young consumers, the post-80s and post-90s groups? Have you noticed that in the current impact of internet thinking, an important point is that "I" has become more important. In our Chinese culture, the education received by the post-60s and post-70s is that "I" should step back; we emphasize collectivism, putting the collective first, meaning the self steps back. Have you noticed that the most essential change in the post-90s consumer trend is that who you are doesn't matter. You're P&G, you're a Fortune 500 company, but that has nothing to do with me. I don't use you; there are plenty of products. Most post-90s consumers are like this now.
So in this context, we need to play a consumption scenario. Whether it's our planning department, the boss, or every employee, sometimes we share among ourselves: Don't talk to me about research. Most of what you research is false. If you ask consumers, "If you have a 20-yuan, 10-yuan, and 5-yuan beer, which would you choose?" They'll choose 20 yuan for face! How can you research the truth? They'll never say they drink 5-yuan beer every day and can't bear to drink 10-yuan. Impossible. So research can't get real results. Research only reflects existing falsehoods.
You have to hypothesize: Suppose I'm a consumer, suppose you're a consumer. If you come to Chongqing, how would you choose beer? If you go to the Brazil World Cup, how would you consume beer? If you go to a bar, how would you choose beer? That's the most essential thing. We need to gain insight into this. It has nothing to do with what equipment I have, how many resources, how much land, or how large the output value. You have to remove that. As long as you satisfy today's needs, market opportunities will naturally emerge.
Basically, the vast majority of official Weibo accounts in the industry—99%—have gone astray. What have they gone astray on? They just moved their ads to another place, moved their official website to another place, moved their corporate newspaper to another place. On the official Weibo, you talk about the board meeting; what does that have to do with consumers? Nothing. On the official Weibo, you talk about your product's nine-step brewing process, world-class quality, equipment from somewhere; no one cares. You're very self-centered. Only by standing from the consumer's perspective, thinking about what they're interested in, will they possibly retweet your content. As I just said: First, outstanding quality, far surpassing competitors, which makes people genuinely willing to share. Second, from packaging to price, the entire product's sensory experience has something different. You must find a point that makes consumers willing to share, a differentiated point.
There are only two issues in communication: first, channels; second, content. Whether it's TV ads, radio, newspapers, or all internet platforms like Sina, there are only two topics. First, our communication channels: for example, CCTV, I buy a 15-second ad for 500,000 yuan. That's a channel. It's the same as the traffic mentioned in internet thinking, because there are 100 million eyes watching, so you have to pay a lot for traffic. You spend 500,000 yuan for one ad, while in a small Chongqing newspaper, a small ad costs only 1,000 yuan because traffic is small. That's the channel. You see, when traditional enterprises do communication, we talk about big communication, including ads and terminals, internet interaction, collectively called communication. Many times we only manage channels, not content. I make an ad: "I'm Jiang Xiaobai, pure sorghum liquor, with so many years of history, and so on, meeting your needs," or "I'm a China Time-honored Brand, won the Sina Top Ten Cases." I shoot a 15-second ad and broadcast it. What concept is this communication? It's spending all the money to buy channels, completely ignoring content. "Gift-giving only sends Nao Baijin" is exactly the same: just broadcast, broadcast, broadcast, and the worst ad becomes highly known. That relies on channels, communication channels. The second type, for example, Huang Haibo's prostitution incident, made everyone in the country know. Did he spend a penny on channels? No, because his content was good enough. No channel costs needed. If my content is good enough, I don't need to spend a penny on communication costs. That's the internet era: if our content is good enough, we don't need channel costs at all.
Why are we grateful to Sina? We haven't had many business collaborations with Sina, and we haven't spent particularly much money, not at the level of CCTV or satellite TV. But by creating content, we achieved the same level of awareness. So content is greater than communication channels. Now all internet platforms are actually the same thinking, including TV. You'll find that even TV ads need to pay attention to content. For example, Chen Ou's "I speak for myself" for Jumei. He invested tens of millions in advertising. Is it more effective than Nao Baijin? He only needed tens of millions in ads to open up national awareness. Why? The "I speak for myself" event generated sharing, secondary dissemination, and fermentation online. The core issue for our promotion is not how much we pay Sina to buy its channels, but how we plan with Sina to create something with enough communication value. If there's something with communication value, plus purchasing channels, that would be perfect.
You see, Sina Weibo has a hot topic list every day. Isn't that based on content? So for our brand planning department, the top priority is that today's enterprises are completely different from those five or ten years ago. Today's enterprises, our brand department spends 90% of its energy researching content, not like before when ads were abundant. I used to say purchasing power determined a company's competitiveness. Purchasing power meant whether the ad person was good at negotiating, turning a 500,000-yuan ad into 100,000, and choosing broad channels: CCTV, satellite TV, print newspapers, outdoor ads, traditional media. But today, that person is no longer important. The platform has changed. There's no better platform for interactive marketing. If we use this platform well, other websites will naturally retweet, comment, and come. They'll also move the content to WeChat and other platforms.
On Enterprise Competitive Advantage:
After you create a sufficiently excellent product, you must use the shortest time and fastest speed to build your own advantage. All enterprise competition is like this. For example, if you create a platform on the internet, an innovative thing, if you're not fast enough, big brands will copy you. Tencent copying you is unavoidable. But is your own gene strong enough? For example, Momo, that software was positioned as very alternative from the start. Big brands can't copy me; our genes are different. There are only two outcomes:
First, you get copied and defeated by the copier.
Second, if someone copies you, they're helping you carry the sedan chair (i.e., promoting you).
What's there to fear? When Sina Weibo came out, Tencent, NetEase, and many others followed with their own microblogging services. But in the end, who's left? Only one best Weibo remains. Naturally, the others were just carrying the sedan chair, heating up the whole thing. Like Jiang Xiaobai, others take the broad road. For example, I said find the opposite. What's the opposite? They take the broad road: big distributors casually pay the manufacturer 10 or 20 million, and distribution quickly spreads. You rely on TV stations for communication; as long as you spend money, you'll quickly gain awareness. But ask: how long does it take to cultivate an official Weibo?
Doing Weibo generally doesn't work with money. Look at big brands, look at baijiu; at least so far, none have surpassed us. Don't look at fan numbers! You need to look at real, effective ones. Why? You know I started early in 2012, and I've spent so much energy on this, studying it deeply. If you want to spend money to catch up with me, I'm on a small path. For example, others drive big trucks and buses on the highway; I ride a dirt bike on mountain roads. That's the logic of competition. First, I can't play with them, but you also can't come to my small path. If your bus comes to my small path, you'll get stuck immediately.
I'm quite proud of our team's Weibo. No matter how you do it, even if your content has no bottom line, it doesn't matter. Look at us: today they're mocking me on Weibo, saying I stared at a beautiful woman with wide eyes. That's fine; it's banter. You tease me, and I can interact back. I ask: for big enterprises, listed groups, big companies, can your chairman or boss interact with your official Weibo saying you stared at a beautiful woman with wide eyes? Impossible. That's not replicable. You play your game, I play mine. Well water and river water don't mix. You can't enter this field.
This article has been slightly abridged. Thanks to Taishan Beer and Sina for their support!
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