Source: Jinbo Finance (ID: jinbubo)

The vigorous new consumption movement has made many people successful, but it has also blocked many entrepreneurs, and even more are facing the mid-scale trap.

Recently, I have observed some brands that have risen rapidly and, to a certain extent, found ways to cross the mid-scale trap. I also talked with the senior strategist behind these brands, and I will gradually unfold their thoughts in the latter part.

****Involution of Traffic, Ephemeral Brands

Extended pre-sale periods, increasingly complex rules, and brands' competition for top-tier resources... This year's Double 11 might be a turning point, representing that the main dividends have been fully consumed, and everyone is competing for limited resources and entry points.

In the merchant self-broadcasting that new consumer brands were previously good at, according to Tmall's official statistics, among the 9 brand live-streaming rooms with GMV exceeding 100 million yuan in the week after the pre-sale period, 7 were international traditional big brands.

The birth and rise of new consumption also created an illusion: as long as you catch the ride of 'seeding + live streaming + short video', even the youngest brand can challenge international giants. But pure traffic logic is fragile, and companies cannot build a solid brand asset.

In the long-term competitive landscape, mind share determines market share; brand mind share determines market position, and mind share is positively correlated with market share.

As the mobile internet dividend peaks and traffic costs continue to rise, new consumer brands inevitably turn to the second half of 'brand mind share'.

****The Mid-Scale Trap

Currently, there are a large number of mid-sized brands in the Chinese market with annual sales of 5-10 billion yuan. As they progress, they find that traffic becomes more expensive, homogenization is obvious, and innovation is insufficient. Traffic can help brands quickly scale up, but it also easily causes 'false obesity' problems:

Traffic hijacking: Growth based on platform traffic purchases rather than organic traffic will be counterattacked by traffic, because competitors can always steal your business with higher traffic costs. Live-streaming e-commerce, which was once a 'new channel dividend', has gradually become a centralized monetization of big brands' brand momentum.

Weak marketing: Inability to effectively penetrate new channels/media, lost in discrete and primitive user data. Brands need to focus, focus, and focus their core messages, and occupy the main entry points of user information acceptance through high-quality content, achieving single-point breakthrough.

Product homogenization: The rise of new consumption lies in creating new categories, but facing the entry and imitation of competitors, how to continuously occupy the cognition of the new category requires brands to monopolize a certain 'mind share'. If they cannot differentiate, they will fall into price wars.

Growth bottleneck: Without memory points, brands cannot obtain sustainable growth capabilities. As Steve Jobs once admitted: Marketing is about values. Only by forming memory points on unique selling points and values will users actively search for the brand name or the keywords the brand occupies, leading to more efficient long-tail conversions.

Transformation difficulties: Traditional enterprises lack guidance for transformation and cannot achieve focus and unified output. Just like Li Ning, which once imitated Adidas and catered to the post-90s generation, found its strongest slogan through the national trend - 'China Li Ning'. Behind this is Li Ning's shift from a 'wholesale model' to a 'retail model', taking control of product advantages, connecting offline stores and online malls, solving inventory pressure while gradually increasing brand value, and extricating itself from the price war quagmire.

Therefore, traffic operations accelerate the growth of new consumer brands, but how to maintain sustained growth requires returning to respect for the logic of brand growth.

Fortunately, I see many new brands are transitioning to mass-market brands, escaping the 'mid-scale trap'. For example, avoiding the weak positioning of 'black technology' and 'small home appliances', SKG, which entered from the 'fashion' attribute, used the core tactic of 'celebrities are using it' to occupy the user mind share of the neck massager category, achieving over 275% revenue growth in one year and ranking first in category sales; Milkground, after positioning in the cheese track, achieved 250% revenue growth in two years and a 1100% market value increase, 'For cheese, choose Milkground' has widely entered user mind share, making it the leading brand in the cheese track; As a classic case of traditional enterprise transformation, Huaxiangyuan amplified the cultural attributes of traditional categories and the momentum of origin, efficiently converting them into perceptible brand mind share and communication momentum for high-end Chinese tea, with sales growing over 60% year-on-year and over 2,500 stores nationwide... These brands are super samples in the new consumer brand camp that have escaped the mid-scale trap. To deconstruct these samples and find the logic behind scale growth, we specially interviewed Chen Jinhong, founder of Hongdao Strategic Positioning Consulting, which serves the above brands, to discuss its positioning theory system - the 'Positioning Breakout Strategy System'. Perhaps, for new consumer brands, in a media environment full of variables, uncertainty, and dynamics, the 'Positioning Breakout Strategy System' is the path out of the 'mid-scale trap'.

Below, I will deconstruct it one by one with frontline practical cases.

****No Breakthrough, No Establishment: Occupying Mind Share

'If everyone in the world uses the same old method to create wealth, then what is created is not wealth but disaster.'

In the book 'Zero to One', PayPal founder Peter Thiel said this. Under the education of market economy, we more or less believe in a word - full competition.

Whether it is product positioning, channel pricing, or marketing communication, they all anchor on a 'follow strategy', that is, focusing on competitors rather than purely from a market perspective, leading to homogenization, price wars, and continuously compressing brand premium capabilities.

But brands that can form a premium are often not how similar they are to competitors, but how different they are. This differentiation occupies a certain 'monopoly', that is, achieving a monopoly position by solving a unique problem, 'escaping' passive competition.

In terms of cognition, such 'monopoly' enterprises achieve 'cognitive occupation' in a specific segment, such as Lululemon and yoga scenes, Hermès silk scarves and travel photography, Onitsuka Tiger's arch support and professional sports route...

User mind share is the ultimate battle for brand marketing, which includes four levels: selecting the battlefield, charging the high ground, advancing positions, and consolidating results.

Selecting the battlefield (core): Determine strategic positioning and clarify the results to be achieved;

In the current environment of constantly changing media and user needs, positioning is to find and open the key to user mind share in a dynamic environment. It needs to find 'pain points' and 'itch points', clarify users' hidden needs, that is, based on unmet needs, find category opportunities; secondly, it must fit industry trends, ensuring that the chosen track has sufficient volume and growth space; finally, it must effectively differentiate from competitors to avoid falling into homogenized competition. In SKG's strategic positioning stage, Hongdao Positioning Strategic Consulting avoided the two positions of 'black technology' and 'small home appliances', the former being strongly associated with Xiaomi and Mijia, the latter occupied by Bear Electric in category cognition, but anchored on the 'fashion massager' positioning, fitting the aesthetic needs of younger consumer groups, distinguishing from the audience of traditional massagers.

At the same time, 'fashion' expresses a lifestyle, which has strong extensibility. Through this concept, it can radiate to the entire massager market, laying a long track for subsequent growth.

Charging the high ground (vanguard): A hit product is a powerful weapon for a brand to charge the high ground in commercial warfare, determining the initial momentum.

In the past, it was to make 10 kilometers wide and 1 centimeter deep; now it is to make 1 centimeter wide and 10 kilometers deep. The cost of error tolerance is getting lower, and rapid iteration in category selection and product design is particularly important. Brands become more cautious and agile in resource investment, avoiding falling into the trap of 'fake needs'.

Therefore, unlike the 'brand image theory' approach in the traditional media era, in these new channels, new consumer brands first create a hit product, form user mind share and product reputation, and then turn to brand asset accumulation.

In the 'Positioning Breakout Strategy System', a logic for creating hit products is built from three dimensions: super single product, super selling point, and super experience. SKG, positioned as a 'fashion massager', through headphone-style design language and 'Wang Yibo same style' celebrity endorsement strategy, solidifies the brand positioning of 'fashion massager', continuously iterates flagship products, and firmly guards the category advantage. At the same time, in terms of scene perception, just like 'Afraid of getting angry, drink Wanglaoji', SKG promotes the super selling point of 'Neck tired, use SKG neck massager', placing scene pain points and product demands upfront, forming associative memory in a specific scene. In addition, as mobile and computer screens occupy a lot of young people's time, relieving neck problems has become a common need, driving rapid growth in hit product sales. Brand cognition needs to be conveyed through product experience and sensation. SKG, through 'physical kneading + pulse' massage sensation and fashion appearance and other visual senses, makes the positioning information of 'fashion massager' easier to perceive and experience. Similarly, Huoji Disinfection Appliances found a niche in kitchen appliances with 'disinfection knife holder'. In terms of product appeal, Hongdao Strategic Positioning Consulting supplemented three core messages for Huoji Disinfection Appliances: storage, high temperature, and ultraviolet rays, thereby highlighting the core positioning of knife and chopstick disinfection. Effective product conception needs to conform to users' existing cognition, so Huoji Disinfection Appliances emphasized the sensation of 'high-temperature disinfection'. When female users take out chopsticks, they can feel warmth, which is a high-quality sensation for disinfection appliances.

Advancing positions (entry points): After tearing open a gap in mind share, it is necessary to occupy entry points, advance the combat troops in a positional manner, and expand the brand's private domain pool. An effective positioning is a sharp nail. To implant it into user mind share, a hammer is needed to continuously, repeatedly, and saturately strike, that is, to occupy the main entry points of users' lives and consumption paths, complete the implantation of mind share, and establish the associative memory between the brand and its category. Hongdao Strategic Positioning Consulting categorizes the main entry points as: new channels, traditional e-commerce, and top livestreamers.

When Milkground laid out entry points, it emphasized 'upholding integrity and surprising the enemy, quick decisive victory'. Before laying out offline channels, Milkground used strong advertising exposure for 'air strikes', forming brand communication momentum, then promoted 'ground advancement' in offline channels, launching blitzkriegs in hypermarkets to occupy core display positions in offline channels. Facing traditional e-commerce, Milkground continuously focused on 'healthy snacks', through keyword layout, directing searching users to Milkground's store, firmly guarding category word entry points, completing continuous traffic diversion and long-tail sales. In cooperation with livestreamers, Milkground anchored on high-momentum top livestreamers, being the first in the industry to cooperate with Viya and Li Jiaqi, and establishing exclusive binding. While quickly forming sales and buzz, it also achieved 'category blockade' in high-traffic positions.

If viewed with ROI thinking, this investment is excessive, even wasteful to some extent, because the marginal effect of traffic is diminishing. But user cognition is a thick barrier. To establish an unbreakable category association, brands need saturated attacks, continuously hitting in a short period to penetrate the barrier and inject brand mind share, which requires accommodating short-term 'waste'. Once the cognitive barrier is broken, the brand establishes association with its category, and user mind share will last for a long time. It is not traffic logic, and competitors cannot replace the brand's position in user mind share with higher traffic costs.

Consolidating results (communication): Content is becoming increasingly important; only good content can maximize the value of traffic.

The new marketing model has largely changed the gameplay of super brands, often strengthening topic creation through content, or achieving interaction with users through emotional connection, so as to consolidate mind share and occupy the highest position on the mind share ladder. Taking advantage of Diaoyutai State Guesthouse and BRICS International Summit, Huaxiangyuan Tea occupied the mind share of high-end tea, but amid changes in market demand and competitive landscape, the company faces new challenges.

This challenge is not at the physical level of product quality, but at the mind share level of high-end users.

This group of people likes products that are not built by burning money on advertising, nor hyped by speed and scale. As a product targeting user mind share, the focus is on understanding and guiding the psychology of the target audience, making people recognize and pursue it from the bottom of their hearts. At the same time, this group has strong circle attributes. To achieve circle recognition, in addition to top-down influence from circle leaders, overall mind share may be more important. The choice of circle leaders is definitely not the richest in the circle, because in their view, the comparison of cultural attributes is greater than the possession of physical wealth. This means that Huaxiangyuan Tea needs to 'high-profile and high-impact', needs to 'be abstract' - extract the cultural attributes of the tea industry. Around its strategic positioning, Hongdao Strategic Positioning Consulting designed a communication content matrix. First, reshape the content main axis - 'Light of National Products, Manor Quality', launching a combination of tasting sessions and PR campaigns, using 'Eight Manor Quality Standards' to define high-end Chinese tea.**

Second, create phenomenal topics, such as during Huaxiangyuan's 20th anniversary celebration, Huaxiangyuan Tea invited Wu Xiaobo, Feihe's Leng Youbin, CCTV's Chen Weihong, and other influential people in the high-end business customer group to support, and at the opening of its Shanghai Bund store, cooperated with the Hurun Wealth List to release the World's Top 500 Enterprises list.

Brand is the biggest asset. When creating and maintaining brand assets, we need a 'big idea', such as occupying a new category to implant the new brand into user mind share. Then the brand repeats, repeats, and repeats again, using 'resonance-triggering' content to convey the brand's core value to users, in order to maintain brand impression and continuously accumulate brand assets.

****Expanding Results, Multi-Level Growth

The gene of an enterprise is expansion.

When IBM was 'ravaged' by Japanese microprocessor companies and its market share collapsed, the company internally considered splitting the team to follow the 'small and beautiful' business trend of the time, but Lou Gerstner believed: The small companies I have seen all think about how to become big, not the opposite. IBM staged an elephant dance, and ants on the stage must leave. In addition to the external environment, enterprises also need expansion to enhance enthusiasm, that is, to give everyone a goal. As I often say: Every new consumer brand has the ambition to become a mass-market brand.

In the founding team of Genki Forest, employees mostly came from traditional beverage giants; the R&D director once worked at Nestlé, the production director at Coca-Cola, and the sales director at Nongfu Spring. This allowed Genki Forest to clearly know how to connect with the industry's top resources and understand traditional brand operating methods from the start. As I recently studied the Double 11 trends, I found that platform resources are shifting towards large-scale brands or brand groups. This scale is reflected in the transformation from super single products to hit product matrices.

In the path of new consumer brands transitioning to mass-market brands, Hongdao Strategic Positioning Consulting summarizes it into four stages: the startup period of exploring hidden needs, the development period of endorsing the category, the maturity period of expanding the category, and the extension period of extending the category. This is the necessary path for new consumer brands to expand results, and it is also a dynamic strategic upgrade - expanding the category and extending the category. To this end, Hongdao Strategic Positioning Consulting has planned three service periods: the first year's strategic research period and landing support period, and the second to tenth year's strategic upgrade period, accompanying new consumer brands or traditional enterprises in transformation over a ten-year span, planning multi-level growth capabilities in the startup, development, maturity, and extension periods;

In terms of team building, Hongdao Strategic Positioning Consulting is internally divided into static 'positioning' and dynamic 'breakout'. The former finds 'stability' for the brand, identifies the 'focus point' and 'direction of force', while the latter uses 'magnitude of force' to quickly convert brand momentum into kinetic energy combining sales, buzz, and user mind share.

In terms of team experience, it covers both major consulting companies in positioning and frontline operators of new consumer brand breakout & mature brand operations, with capabilities covering the entire brand growth cycle.

****Brand Power is the Biggest Dividend

Looking back at the development of Chinese consumer categories, after the standardization and homogenization of the big industrial era, consumer demand has become nonlinear and unpredictable, and large categories have fallen into confusion with increasingly blurred cognition, while new categories focus on 'narrow targeting'.

As the above new brands (both new consumer brands and traditional enterprise transformations) have become synonymous with a certain category or the first brand that comes to mind in their respective fields, they have escaped 'price competition' and formed intangible premiums.

This differentiation, based on rigid needs, super pain points, and continuous content conversion, is brand momentum, which will further amplify channel momentum. Because with the same reach opportunity, a brand that trusts you, recognizes you, or even empathizes with you will have more efficient conversion.

The biggest dividend is brand power. For brands, only by finding the right direction and setting sail can they avoid being swept away by the countercurrent.

Only when cognition and capability match can the starry sea appear.

Are you 'watching' me?