JDB has recently been plagued by troubles, starting with cooperation disputes with COFCO Packaging and ORG, and then falling into a restructuring dispute with Zhonghong Holdings. The financial statements disclosed by Zhonghong Holdings, showing insolvency, put JDB on the defensive. Subsequently, various media outlets followed up, with rumors of declining market share, product shortages, layoffs, company dissolution, and unfulfilled promises to distributors spreading everywhere. It seems that JDB has fallen into a very dangerous situation. However, in the past two days, I visited several supermarkets around me and found that the red-can JDB on the shelves is not as miserable as described in the rumors: Not only are there red-can JDB products on the shelves, but the production date is July 2018, which is inconsistent with the media reports that many distributors couldn't get red-can JDB after June. In addition to the red cans, there were also a small number of gold-can JDB products, but the production date was December 2017. At the same time, I also checked the production dates of red-can Wanglaoji on the same shelf, all of which were June or July 2018. In the places I observed, JDB and Wanglaoji are evenly matched. Of course, the places I visited may not represent the whole of China, and JDB may have allocated limited resources to ensure supply in key markets. If any concerned friends are interested, they can also pay attention to the supermarkets around them and exchange information. Whether it's disputes or rumors, ultimately it's the market performance that determines a brand's future. If JDB can take the initiative in the market and obtain abundant cash flow, then all the problems mentioned above may not be problems at all. The products are not much different, and the two brands, JDB and Wanglaoji, are equally well-known. Most consumers treat them as the same. What determines their different fates, besides internal management and team execution, is the different marketing strategies, which become decisive factors. The early competition was mainly for existing markets, with both sides making great efforts to make up for their shortcomings: JDB was frantically advertising to rebuild its brand, change packaging, and consolidate its original market share, while Wanglaoji focused on capacity building and seizing channels. Both sides had their own advantages. I don't know if JDB's ultimate goal was to strangle the reborn Wanglaoji in its cradle, but the power of the brand is extremely strong, and the final result was that Wanglaoji still rose again irresistibly. At this stage, the strategic choices of both sides seem inevitable, but it is said that JDB's annual advertising investment exceeds 5 billion yuan, and in order to consolidate channels, it made considerable promises to distributors. Whether JDB's excessive investment in marketing led to financial unsustainability and laid the groundwork for the company's later difficulties is worth studying. A management team that was once invincible and glorious, facing an opponent like Wanglaoji, which was initially weak but backed by Guangzhou Pharmaceutical Baiyunshan with strong capital, powerful brand, and great potential, and basically impossible to eliminate, whether it can adjust its business thinking and style in time, and have a clear positioning for the future development of both sides, from exclusive to win-win, is very important. If the excessive investment is only for an impossible goal of killing the opponent, then excessive aggressiveness will instead cause the originally strong enterprise to become weak. When JDB's brand is already well-known, and Wanglaoji has also risen again, and the two sides have formed a standoff in the market, the competition has actually entered a new stage. But at this stage, JDB, whether it has exhausted all its strength or has no new ideas, suddenly lost direction in marketing. The only major marketing move they thought of, or that we can see, is the re-launch of red-can JDB! We won't discuss whether this strategy is reasonable or will succeed, but its goal is clear: to grab as much share of red-can Wanglaoji as possible in the original channels, with the target still being the existing market for herbal tea drinks. Compared with JDB, Wanglaoji's positioning is completely different. We find that Wanglaoji's goal is on the incremental market. In the past two years, Wanglaoji has successively launched low-sugar and sugar-free herbal tea, concentrated black herbal tea, and freshly brewed herbal tea in physical stores, and also worked on product packaging, launching multiple personalized cans and slim cans; in terms of channels, in addition to the original catering, circulation and other channels, it cooperated with JD.com to open up new sales channels; in terms of promotion models, it innovated, in addition to continuing to sponsor popular TV programs, it also deeply cooperated with online media and popular game platforms such as Tomorrow's Son and Storm Heroes, and launched customized cans, inserted advertisements in movies like Us and Them, and for the first time invited Zhou Dongyu and Liu Haoran as celebrity endorsements. All these measures are aimed at the new incremental market, trying to gain more consumers and more consumer groups. In addition to innovation in the herbal tea market, Wanglaoji also launched new beverage products such as Dazhai Walnut Milk and Yerou Coconut Juice, seeking to extend channels and brands. JDB chooses to continue to fight in the existing market, while Wanglaoji strives to open up new incremental markets and more development possibilities. This strategy gives the impression that JDB is fighting for share and survival, while Wanglaoji is fighting for the development of the entire industry and market. Even if many data are confusing and unknown, the difference in industry status and mentality between the two brands is already exposed through their different strategies. Wanglaoji already has more of the demeanor of an industry leader. However, although Wanglaoji is temporarily in a leading position, it is not without worries. First, JDB's brand influence still exists, and the re-launch of red-can products is highly targeted, which can easily cause consumer confusion and will have a certain impact on the sales of red-can Wanglaoji. Second, although JDB is currently in trouble, these problems are not unsolvable. Once JDB introduces new capital and makes marketing investments more targeted and controlled, the possibility of recovery is still high. Just as JDB could not kill Wanglaoji, as long as JDB does not mess up itself, it is not easy for Wanglaoji to completely defeat it. Third, although Wanglaoji has many new tricks, they are not yet significant, and the main sales still come from traditional products and channels. If Wanglaoji disperses resources and energy due to diversified attacks, it is not impossible to be overtaken by JDB in the old market. Therefore, when Wanglaoji is doing incremental business, it must not forget the existing market. It must not relax in the traditional red-can market. Since the opponent has given up peaceful coexistence and chosen to fight a chaotic battle, trying to counterattack in the chaos, Wanglaoji must respond, temporarily give up the pursuit of higher profits, and step up marketing until the opponent concedes. Source: Jinhai Haike's Xueqiu original column -END-