**In 2008, Xinhua News Agency published an article titled "China's 70,000 Tea Companies Cannot Match One Lipton," directly pointing out that China's tea industry is "large but not strong." To this day, the branding problem in the tea industry has not been effectively resolved, and the industry remains highly fragmented. However, Xiao Guan Tea has become a benchmark case in branding in recent years.

In a recent interview with Xiao Guan Tea founder Du Guoying in Li Xiang's series column "Detailed Talks," the author was deeply impressed after reading it. His approach and methods for product development are worth referencing and learning from. Today, we set aside the tea industry to explore a deeper question: how to build a brand like Xiao Guan Tea in a highly fragmented industry. Let's first look at some of the insightful quotes from the interview that resonated with the author:

  1. If we are talking about a product, what is its core value point?
  2. If a product's market acceptance does not meet expectations, people tend to attribute it to their own lack of marketing skills or to competitors being too good at marketing. Only a few people will consider whether the product itself has not found the user's need point, or whether the value it provides is insufficient to make users pay.
  3. Product is 1, marketing is 0; this is a basic principle.
  4. Demand comes first, then product refinement, and only then marketing.
  5. When making a product, you must re-examine the category: what problems have been solved, what problems remain unsolved, what valuable problems we should solve, and how to bring direct value to users.
  6. Through innovation, create new value for users.
  7. A product manager without marketing thinking, without thinking about needs and user pain points, will find it difficult to make a good product.
  8. In terms of communication, you should spend more time on content than on media.
  9. Entrepreneurship should follow the trend; what trend? One is advantage, the other is trend.
  10. The two hardest things in entrepreneurship are: first, understanding the target audience; second, making the product distinctive.
  11. The branding of some categories is related to the depth of product processing. Selling pork may not require a brand, but selling ham sausages definitely does.
  12. Product is the carrier of the brand; if the product fails, the brand ceases to exist.
  13. From product to brand, there are three layers: texture, aesthetics, and emotion.
  14. Content is 1, media is 0. Although both content and media have undergone earth-shaking changes compared to the past, the sequential relationship between content and media has not changed, and the same applies to the relationship between product and marketing.
  15. The most effective way to make a product is to work backwards: start from needs and scenarios, gain a clear insight into needs, and then begin the entire product design, supply chain integration, production, and organization.
  16. What we want to make is not agricultural tea, not cultural tea, but consumer goods tea.
  17. Needs do not require education.
  18. To break the deadlock, you need to find methods; both product innovation and marketing innovation must pass. If the product has no distinctive features, you won't pass; if marketing is inefficient, you won't pass. Both must be passed.
  19. Industry disruptors are usually of two types: when old players have no food to eat, they change their tactics and methods; or outsiders come in, regardless of the past, what matters is what users need, because the past has nothing to do with them.
  20. A great business organization is ultimately determined not by tactics but by values. Tactics are important, but not decisive. Looking ahead ten or twenty years, your values are decisive.

When Du Guoying entered the tea industry, he discovered that tea lacked unified standardization. It is precisely because of this lack of unified standardization that the industry has problems with product pricing. This is not only a problem for tea but for almost all agricultural products, and it is an important reason why it has been difficult for brands to emerge in the industry for many years.

Xiao Guan Tea provides a very good reference for the industry: it takes a product that lacks standardization and has no clear value anchor, and solves the cognition problem by providing a value anchor in a different way. There is an important concept here called "value anchor." That is, in a given category, what standard do consumers use in their minds to evaluate whether a product is good or bad.

When we describe beer, everyone in the category knows that the fresher, the better. For baijiu (white liquor), everyone knows that the older, the better. For cars, the common perception is that the stronger the performance, the better. What about tea? You cannot use the standard of Longjing to evaluate Pu'er, or the standard of Tieguanyin to evaluate Biluochun.

Xiao Guan Tea uses the concept of "master" to tell consumers that its tea is made by the best masters. In the minds of Chinese people, "master" implies professionalism, quality, and scarcity. Through this value conversion, consumers gain a clear sense of value anchor.

This is like Hermès using crocodile leather to tell consumers in a different way that its products are so distinctive.

Although in 2019 the media exposed it as a "IQ tax," what I see is that Xiao Guan Tea does provide a reference solution for the industry. This solution can address the problem of many domestic agricultural products struggling to build brands.

This is a very effective methodology.

Moreover, Xiao Guan Tea has added a social dimension to its marketing. In the past, good tea was also given as gifts, but people had no perception of the product's value, and price was not equated with value.

In later marketing advertisements, Xiao Guan Tea made an important point: "When distinguished guests come, serve Xiao Guan Tea." This gave the product a gift attribute, and gifting became an important consumption scenario for Xiao Guan Tea.

Let's review Du Guoying's approach to Xiao Guan Tea from the beginning. First, he worked backwards, starting from needs and scenarios, to gain insight into which consumer needs were unmet or only partially met, and not yet well satisfied.

Then, he turned back to create a product based on the problems users face in their needs and scenarios. The premise of this product is that it can meet consumer needs, which is the so-called value point. However, since the Chinese tea industry lacks a value consensus to rely on, Du Guoying used the concept of "master" to find a new value anchor, and designed the product to be sufficiently textured, aesthetic, and emotional.

But these are all superficial. Behind the surface, Du Guoying treats the tea industry as consumer goods, as standard products, and uses new rules and definitions to standardize a product that has not been standardized for thousands of years. Only in this way can Xiao Guan Tea grow from 2 billion to 20 billion, creating enough imagination space.

Turning back, let's discuss the issue of new consumer brands making tea in China. I think the biggest problem is that many new consumer brands have not found a clear scenario for their products. Without a scenario, the so-called demand does not exist.

More importantly, even if there is demand, they overly pursue packaging aesthetics and technological innovation, without truly understanding users' real needs and allowing users to clearly perceive the value and memory points. This is the biggest problem for new consumer brands. It is also the real gap between these tea brands and Xiao Guan Tea.

Unfortunately, although Xiao Guan Tea has solved the value anchor for its own products, it has not fundamentally solved the value anchor for the industry as a whole. This is also an important reason why Du Guoying has been slow to launch "daily tea" (kouliang cha).

Of course, we cannot demand that a single company solve this problem, but it is a fundamental issue that requires deep thinking from people in the industry.

Du Guoying's thinking is elaborated in detail in Li Xiang's "Detailed Talks." I strongly recommend this book to anyone involved in marketing; it is a rare book in recent years that thoroughly explains marketing.

What I want to extend here, as the title of the article states, is that China's agricultural products have a market size of trillions. Apart from Zespri and Chu Orange, there has not yet been a large-scale agricultural product brand. This is both a problem and an opportunity for China's agricultural products.

Du Guoying's method starts from needs and scenarios, finds users' needs and pain points, and for these pain points, finds a value anchor in areas without value consensus, and uses it as the value point and memory point for product communication. Finally, through high-quality, standardized products as the quality anchor, it solves the branding problem of agricultural products.

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