Click image for details Phase 1: Enlightenment Stage (1978-1988)

Consumer Demand Analysis The average Engel coefficient over the decade was about 60, a typical era of hunger. Consumer psychology was in a state of confusion, showing a typical "chaotic mental model," with imitation and following as main features. This was a paradise for the post-60s generation, who were then about 20-30 years old. Consumption moved from mouth (food and beverages) to face (cosmetics), then to home (appliances), a typical Maslow's hierarchy of needs. Marketing Characteristics Analysis (78-88): Groping in Chaos Chinese enterprises did not yet understand what marketing was, nor did they know marketing theories. Everything was exploratory; all marketing was essentially about selling products. In this hungry era, both consumers and enterprises were fighting to survive! The market was in a primitive chaotic state, with sharp contradictions between supply and demand, and marketing tactics were more reflected in primitive strategies. The marketing war was a melee, a chaotic battle! In terms of consumer purchasing methods, the planned economy era's ration coupon purchasing was dominant, with supply and marketing cooperatives as the main material circulation channels. Manufacturers' marketing: couldn't sell. Marketing theory was fragmented, relying on ideas and planning, an era for smart people with quick minds, far vision, boldness, and ideas. Keywords of the Enlightenment Era: 78-88---Hunger Supply-Demand, Ideas Rule. The contradiction between not being able to buy and not being able to sell in an era of material scarcity, with no systematic marketing model, typical fragmented information asymmetry. A single idea could break through the supply-demand value chain, saving an enterprise and making an era's king. Representative figure: He Yang, known as "King of Ideas." Comparison with American Marketing Theory

  • At the end of 1988, China's GDP was 312.3 billion, while the US was 5,252.6 billion, a gap of 16.8 times.
  • Typical consumer characteristics of the era: rise of rebellious spirit, hippies, free love, Woodstock Music Festival.
  • American theoretical contributions to marketing: 4P marketing viewpoint—McCarthy; "USP" viewpoint—Reeves; Brand image supremacy—David Ogilvy. Phase 2: Icebreaking Stage (1989-1998)

Marketing Element Analysis

  • Demand: Products were scarce, but needed to be cheap, which laid the foundation for price wars.
  • Brand: Brand loyalty had not yet been established; simple patriotism led to "National products should be strong"—the rise of Changhong.
  • Product: Having something was better than nothing; quality issues were acceptable, but service had to be good—Haier's service moved Chinese people.
  • Channel: The first- and second-tier wholesale model was key; the "general agent + provincial agent" model swept the market.
  • Promotion: Price war buy-give activities became the era's focus, leading to cross-regional selling.
  • Advertising: TV popularity and rich video content created a huge siphon effect, forming "advertising rings, gold pours in."
  • Organization: An era of heroism, advocating bosses and individual heroism, with no organizational prototype yet.

Era Marketing Views

  • Brand is advertising, an influence that persists today;
  • Marketing is sales, lacking the "marketing" aspect;
  • Marketing strategies were relatively thin; China saw the birth of numerous advertising planning companies;
  • Enterprises had not yet formed marketing organizations; marketing functions had not played a role; marketing mainly referred to sales;
  • The common marketing strategy was price wars, reflecting the extreme poverty of Chinese marketing thought. Intensified competition led most enterprises to think of clearing the market through price wars, dominating alone, ignoring profits and R&D investment, laying the seeds for later competitive weakness. This is a common ailment and deep-rooted problem of most Chinese enterprises;
  • The sprouting of new marketing models based on local Chinese competitive thinking ("local model") began to appear.

1989-1998: Icebreaking Era, Advertising Rules. Marketing strategy competition was based on price wars built on capacity scale, attempting to cripple opponents and sweep them off the historical stage, dominating alone. Marketing war was advertising war, high-profile and aggressive; these ten years were the most prosperous for CCTV. Marketing tactics were simple, crude, and extremely barbaric. Typical domestic representative: Ye Maozhong—"Advertising Man's Notes." Comparison with American Marketing Theory (70s-80s)

  • US situation: The core marketing issue was how to sell products?
  • American marketing theory: 1970 Positioning theory—Ries & Trout; 1980 "Marketing Management"—Kotler. Phase 3: Rise Stage (1999-2008)

Technological progress, the rise of the internet, an era of down-to-earth, meticulous work.

  • Consumers became increasingly cautious, with growing fear of being cheated and regret.
  • Brand and word-of-mouth became increasingly important; first- and second-tier brand purchase rates and third- and fourth-tier market "using connections and acquaintances" sales models became key sales nodes.
  • Competition intensified; channel-centric tactics were valued by entrepreneurs. Enterprises that developed best in this period mostly owed it to rapid channel expansion and stable development.
  • Marketing competition shifted from "high-profile" to increasingly emphasizing "tactical and technical" delicate operations.
  • Marketing organization and management became important content in marketing system construction.
  • Brand theory finally gained attention; positioning school, brand image supremacy school, USP viewpoint, integrated marketing theory, and marketing management science blossomed across China. Among them, local Lu Changquan's cutting theory and Ye Maozhong's conflict viewpoint were most representative.
  • China's most viable local marketing theory system was finally born and effectively validated, with Professor Bao Zheng's "deep distribution" thought, one of the "Four Gentlemen of Hejun," shining brightly.

1999-2008: Rise Era, Channel Rules. Excessive advertising wars woke up Chinese entrepreneurs. In this decade, entrepreneurs were very clear-headed, abandoning illusions in marketing, being down-to-earth, mainly carrying out a series of marketing actions around channels. "Seize channels, win at terminals" was the main theme; those who got channels got the world. The rapid development of private enterprises in the Pearl River Delta and Yangtze River Delta validated this judgment. Chinese marketing developed a model different from abroad: Professor Bao Zheng proposed "reconstructing the marketing value chain with channels at the core," commonly known as 1P+3P deep marketing thought. Another representative of domestic marketing thought: Lu Changquan's "Cutting Marketing." American Marketing Theory Reflection (89-2008, 4P->4C->4R Mutation) In 1992, Clinton took office, starting a new economic model, with IT and internet as representatives leading global economic development. Phase 4: Innovation Stage (2009-2018) 2009-2018: If there is no road, then forge one; rather than waiting to die, fight desperately, maybe you'll carve out a bloody path.

  • Brand: Brand influence is weakening; new brands emerge endlessly, changing rapidly.
  • Product: Various conceptual new products emerge endlessly, a wave every three months.
  • Channel: The rise of e-commerce means channels have moved one step closer to consumers.
  • Price: Price transparency makes "super value for money" mainstream (Miniso).
  • Promotion: Promotions every day, festivals every day, just moved from offline to online, history repeats.
  • Promotion: Word-of-mouth marketing, circle marketing.
  • Advertising: Online short videos, audio, and self-media prevail.
  • Service: The lazy economy era is coming. American Marketing Theory and Thought Reflection: Experiential marketing—proposed by Professor Schmitt around 2004. Seven Pain Points of Current Marketing Dilemma and Status
  1. Customers are increasingly difficult, demands are more personalized, and the sales cost enterprises pay for customers is rising.
  2. Competitors are closely "grabbing, encircling, and blocking"; competition is everywhere; an activity that kills a thousand enemies and injures eight hundred has become the new normal.
  3. New internet business models emerge endlessly, severely weakening and eroding traditional industries' inherent profits through curve overtaking and vertical strikes.
  4. New business growth is weak, old business is hard to adjust; typical is the intensified conflict between e-commerce and traditional channels.
  5. Traditional marketing completely fails: boundaries of direct sales, distribution, channels, etc., gradually blur and merge.
  6. Team management is in trouble: team members are lax, ineffective, inefficient; organizations push execution daily, but turnover remains high. Unwilling to work and not working well—what can be done?
  7. Traditional marketing organizations fail: Facing unprecedented change and turmoil, building effective organizational forms is particularly urgent. Shift from employment model to self-employment model. After mobile internet, phenomena like curve overtaking and hijacking have made China's market resemble the "Age of Discovery." Both external and internal marketing face major turmoil and demand. Marketing chaos is emerging, signaling the arrival of an innovation era. Looking at forty years of marketing, the gradual evolution of "ideas-advertising-channels-e-commerce" behind it represents the following logic and system:
  • The distance between corporate brands and consumers is getting closer.
  • Marketing focus shifts from selling goods -> brand -> channels -> service -> culture.
  • Technological power and progress are the core internal drivers of marketing change.
  • Human nature has not changed; what has changed are marketing means and methods. So the internet era is not scary; what is scary is outdated thinking.
  • China's marketing activities and theoretical development are accelerating. The past thirty years were catching up, the later ten years were innovation, and the next ten years will surely lead the world!
  • Chinese culture is increasingly important; brands with Chinese elements will become more fashionable and trendy. Marketing Predictions for the Next Decade: The Future of Marketing Lies in China
  1. Brand influence will increasingly weaken;
  2. Traditional product boundaries will be reconstructed;
  3. Traditional advertising agencies will all die;
  4. Traditional channel distributors will all die;
  5. Sales models based on precise consumer demand and precise distribution will become mainstream;
  6. The process chain of on-demand customization, production, supply, and service based on personalized consumer needs will continue to force value chain reconstruction and a complete reshuffle;
  7. Digital marketing becomes the soul of new marketing; what you see is what you get, what you think is reality (VR). Source: Hejun Consulting (ID: hejungroup) Author: Gao Chunli, Business Partner at Hejun Consulting New Distribution will hold the 2019 (5th) FMCG + Internet Conference during the Chengdu Spring Sugar and Wine Fair from March 16-18. This conference will focus on the topic "Breakthrough" , with in-depth discussions among brand owners, supply chain service providers, distributors, retailers, and others. Compared to previous conferences, this summit will be fully upgraded. In addition to original topics like channel innovation, city distribution logistics, and distributor transformation , it adds new marketing cases, IP + FMCG empowerment, community group buying, and innovative retail as parallel forums. Through three days of ten high-density, high-quality expert sharing sessions, we believe every brand owner and distributor can learn the latest business models, expert insights, and practical methods, finding new tools and approaches for their own breakthrough in 2019, returning to a path of rapid growth. Review of Previous Conferences -END-