Liu Chunxiong: New Marketing, Rebuilding Marketing Driving Force

The FDIC 2018 China FMCG Digital Innovation Conference, hosted by New Distribution and co-organized by the FMCG Branch of China Electronic Commerce Association, was grandly held at the Shanghai Baohua Marriott Hotel Conference Center from August 22 to 24. The event attracted thousands of industry professionals, including distributors, manufacturers, and internet companies from across the country, filling the venue to capacity.

On the first day at 14:00, four parallel forums were held: the New Distributor Forum, the Deconstructing New Marketing Forum, the Brand Innovation Growth Forum, and the Interpreting Regional Dominance Forum.

The following is the keynote speech "New Marketing, Rebuilding Marketing Driving Force" delivered by renowned marketing expert Liu Chunxiong at the Deconstructing New Marketing Forum, organized by New Distribution for our readers.

These days I feel lonely because I've attended many conferences, but what kind? New retail, e-commerce conferences. I think I'm here to talk about marketing, like crashing the party. Half a month ago, an association, as a manufacturer, held a new retail conference. I asked them why they were talking about new retail; they are manufacturers. They said, if not new retail, what should we talk about? I think that's true.

For many years, from 2013 to now, no marketing-focused platform has invited me to speak. I think today is the only conference in all these years that focuses on marketing. You can see how eager we are, with so many people standing in the back.

It's not that society doesn't need it, but our experts and enterprises have lost their voice at this time. I'm delighted to see that three companies (brands) are here today to talk about new marketing. Due to time constraints, we couldn't invite more companies.

Today we have "Uni-President," a representative of traditional enterprises that have successfully transformed to new marketing. I've observed that every new product they've launched is done according to the new marketing model, with no trace of traditional marketing. Who says transformation is difficult? We also saw an innovative new company create a miracle, and we just heard CEO Gu (Gu Tiefeng of Answer Tea) also created a miracle. So the internet is like wings for a tiger, enabling us to fly, but it requires us to undergo a fundamental transformation.

Our marketing system can be divided into two systems. In traditional marketing, no matter what marketing theory we talk about, you'll find that when companies implement marketing, their organizational systems are the same. We all say products are important, but you'll find that products are not managed by sales, so marketing executives are particularly overbearing.

What is the driving force? The driving force is to solidify functions in an organized way, which forms the driving force. So marketing organizations generally consist of two parts: one is the marketing department, which does brand driving; the other is the sales department, which does channel driving.

For brand driving, we used mass communication as the main form. In simple terms: shout loudly through a loudspeaker. CCTV was the loudest loudspeaker, shouting the loudest and most resounding. Channel driving led to deep distribution, which peaked from 2003 to 2013. So our marketing has no methods, no voice; we are drowned out by the internet's voice, unable to find methods or a voice. That's definitely not acceptable.

Just now, President Gu spoke well: the most productive enterprise in this society is not the strongest, but the one with the strongest ability to adapt to environmental changes. What is our biggest impact? It's the arrival of the internet era. We are familiar with the concept of the "internet era," but do we truly feel it?

Let me interpret what the internet era means for marketers. I studied computer science, though I don't work in it, but I know its logic. I believe the internet era brings three changes from a marketing perspective.

First, the media era. In the past, mass media was marginalized; the era of shouting through loudspeakers is over. Communication has entered the era of social sharing. Why is content so important? Because content is suitable for sharing. Unlike ten years ago when a boss said, what is a brand? A brand is spending 200 million to make consumers remember one sentence. But now that doesn't work. What is content sharing? Today's content cannot be shared tomorrow. So our content production capability must be very strong, and our communication must start from mass communication.

Second, the connection era. In the past, deep distribution relied on people; now we use tools to connect tools, with people in between. You'll find that when you have tools, you can be closer to consumers, so we can connect with consumers. Whether it's new retail or new marketing, both need to connect with consumers.

Third, the digital era. All behaviors can be digitized. At this time, we can use AI and big data to accurately predict consumer behavior. In fact, the Answer Tea system just mentioned is an artificial intelligence system that generates answers.

What is the core of mobile internet? It changes the relationships between people. In the past, we reached consumers through channels and communicated through mass media, but now these interpersonal relationships are being reconstructed. We can be in different places but in the same space. For example, today through live streaming, more people are watching, in the same space as us. So our interpersonal relationships have completely changed.

What is our marketing? Marketing is to change the other's cognition. So we must reshape marketing to reapply it. In marketing, communication is the most important. Why? Because to persuade one person, you need deep communication; to persuade a group, you need to use media. And the internet is the most important media in our era.

What does media determine? Media determines whether you can persuade a group.

If you can use the most efficient media of that era to persuade the public, your marketing project is the highest. So from word-of-mouth in the past to mass communication, mass media emerged in the industrial civilization era. A hundred years ago, P&G first used radio for mass communication. Now it's social sharing, the most efficient tool. Although we still have word-of-mouth, it's now called internet word-of-mouth. If your product is good and shared by others, then we must talk about the most efficient technical means: the internet.

Moreover, the internet is both an organization and a communication carrier, and also a transaction carrier, allowing us to integrate online communication and offline transactions, which used to be separate. Isn't this a big change for us?

If our marketing still relies on online air communication and offline deep distribution, we definitely can't continue.

Now many people can't talk about marketing, so they talk about new retail. If a manufacturer talks about new retail, it's like admitting defeat in a chess game. In the internet era, most manufacturers still rely on new marketing, like Uni-President. Manufacturers can establish connections with consumers, and retailers can also establish connections with consumers. So manufacturers and retailers do the same work: capturing C-end emotional connections and acquiring customers. These tasks are what we call the ability to guide traffic.

So in the end, new retail and new marketing, though from different perspectives, are doing the same thing: capturing C-end emotions, acquiring customers, and guiding traffic. But for us manufacturers, traffic is mine; I can go wherever I want. For example, when Jiangxiaobai first went on JD.com, it became the top-selling baijiu. People asked JD what they did, and they said they did nothing. The reason is simple: because Jiangxiaobai's new marketing was successful, any platform it goes on will see increased traffic.

New marketing and new retail both compete for consumers, but their positions differ. New retail is about reselling, focusing on environment and experience, while we start from the product, emphasizing emotional connection.

In the new environment, we adapt to the new tools provided by the internet. At this time, the standard configuration of new marketing, whether it's President Gu's new marketing or Uni-President's, first is IP, second is community.

IP is a banner. Under this banner, we liberate all of China and let the people live a good life. What is a community? It's organizing the people, like the peasant associations. So IP is the spiritual system, and community is the organizational system. In the past, we talked about products; products are functional recognition. IP is spiritual recognition. So we must add IP's spiritual appeal. IP is a banner, and community is like the peasant associations of Mao's era. We now use online means to organize consumers. We must use both IP matrix and community matrix; this is the standard configuration.

This standard configuration forms two new driving forces for traditional enterprises. The first is IP driving. Now IP is spiritual recognition, which requires emotional output through content. So in the future, the IP department may have the most people producing content. For example, Director Niu from Jiangxiaobai's marketing center, who is here today, has over a hundred people under him producing content. And content production revolves around consumer participation.

The second is the channel system. Today we talk a lot about IP. In the past, the channel system was called deep distribution, which ended at the terminal. Now it's different; at the terminal, we must also connect with consumers through communities. So we have channel + community driving, connecting consumers through terminals.

The promotion department is both the army and the air force. The so-called army means its products must be distributed to terminals; the air force means connecting with consumers. Our sales department in the past was just the army; deep distribution is over. Now the promotion department: channel + community driving, both distributing products to terminals and connecting consumers through communities. So you'll find it's both the army and the air force.

I once visited a boss and asked, what is your company's WeChat index? He didn't know. I asked him to check, and it was over 20,000. I said, do you know what Jiangxiaobai's is? It's several million. He immediately opened his phone and arranged work, saying he would build a team right away.

You'll find, what is IP? IP is communication in the internet era. It's when people pay attention to you, share you, spread you, and discuss you. That's IP. It's not about spending money on ads. At this time, an index will be reflected; your IP can be quantified.

A few days ago, I gave a lecture and said that Shuanghui only reached a million-level index for two days. Why? Because Shuanghui had an incident. It never reached over 9 million, jumping from over 70,000 to over 9 million in one go. That's real attention.

Six Walnut is also a traditional enterprise. Why did it suddenly grow to tens of millions this year, maintaining millions daily? What does this show? It shows that Six Walnut has figured it out and embraced new marketing.

Now many companies are doing communities. I've summarized five levels of community building. Most people are at the first level: pulling their own groups. No matter how many groups you pull, you can't pull 1.4 billion people into a group. You may have strong ties, but strong ties are too few.

The second level is using others and integrating others. Uni-President and Answer Tea are integrating others, so they activate others' communities and create strong ties.

The third level: you'll find that after I output, even if I have strong ties in the group, they don't buy, but some weak ties do. So you'll find we need a large number of weak ties. True business success lies not in your ability to utilize strong ties, but in your ability to commercially convert weak ties. True IP lies in the conversion ability of weak ties.

The fourth level: you can use your strong ties to convert their ties into your ties, which are also weak ties. These ties are not important because they are just numbers. What's truly important is the fifth level: achieving resonance and detonation, which enables commercialization.

So what is the principle of IP detonation? You spend a lot of money, but you don't become IP because there's no resonance or detonation. You'll find that internet detonation happens overnight, in one night. This is where internet communication completely differs from mass communication.

What's completely different? When we wake up in the morning and open WeChat, everyone is talking about something, and then you spread it. You'll find that the internet era has no centralization. Ironically, the lack of centralization creates centralization. Isn't Answer Tea like that? It used decentralization to create a new center, and this new center emerged almost overnight.

We share news headlines every day, but it's not our credit. The result is collective micro-action, instant penetration. We find that 40,000+ concentrated detonations can penetrate, while many basketball promotions with 10 million+ traffic don't detonate.

Last night, I told a leader that IP detonation has an important law: density, communication density. Density means one 100,000+ is better than a national 10 million+. This is the standard configuration of new marketing I'm talking about. IP and community, whether we are traditional or pure internet, both are indispensable. Only for traditional ones, we add channels; for internet, we can ignore channels.

Moreover, the basic logic and architecture of marketing in the internet era are different. The basic logic consists of four elements I proposed. First, what is scenario? Just now, President Chen mentioned that Xiaoming Classmate's promotion theme this year is scenario. Scenario becomes the marketing theme, telling us that the user era is over. So scenario should assume consumers are chameleons; they become the animal of the scenario they are in. This is scenario orientation. We are no longer consumer-oriented. You must say who you are drinking for, and in what scenario and how. This is scenario logic, so user orientation is outdated.

IP is brand logic. Brand logic is not about remembering, but about participating. Because with internet tools, whether you are a manufacturer, retailer, or distributor, you can connect with consumers. What is communication logic? Because all marketing has one purpose: to change consumer cognition. What is consumer transaction purchase? It's the result after cognition is changed. So these four elements replace our so-called community in the past.

Our 4P analysis framework is hard to sustain. Now products must become IP because products must spread themselves. So communication must have social attributes. How can products have social attributes? Let me give an example. In the second half of last year, the boss of "World Duck King" told me a sentence: except for meat, everything else of a duck is valuable. That is, I eat duck not for the meat; eating meat is for hunger, eating bones is for leisure. So except for meat, everything else is valuable. He deeply expressed what consumers need: I'm not hungry; I'm full, eating for fun. So Shuanghui made a change: I'm not a meat product enterprise; I'm a leisure meat product enterprise.

Product IP-ization is simple: function is the premise, sociality is the standard configuration.

The sociality of a product is its standard configuration. So we'll find that Answer Tea has social attributes, and Xiaoming Classmate has social attributes. We need to find a medium for people to interact for the product; this is product IP-ization. Channels become communication points. Promotion means all promotional activities have communication value. Our promotional activities are a form of sales, like Jiangxiaobai's small tavern promotions, which are activities where consumers participate in spreading.

Finally, price is when you do these tasks well, you have value, and it's quantified. So new marketing, I think this is the basic system. Through the practice of many enterprises, I think the companies invited today are all practicing new marketing. So far, the basic concepts and framework have been formed. Thank you all.

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