Brand trademark licensing has always been a contentious topic, especially as licensing periods for famous brands expire, leading to battles between the 'biological fathers' and 'foster fathers' of brand trademarks. From the perspective of public opinion, most people tend to sympathize more with the 'foster fathers' of brand trademarks. Brands like JDB often gain more support from the public, while the 'biological fathers' like Wong Lo Kat are often on the defensive in public opinion but frequently win in court.

Will China Red Bull become the next JDB?

'Red Bull' has also seen a life-and-death battle over trademark licensing. China Red Bull faces many awkward situations, but unlike the 'Wong Lo Kat' case, China Red Bull is unlikely to become the next 'JDB'. The main reason is that in the Chinese market, China Red Bull holds a certain initiative. Although it operates under a brand licensing model, unlike JDB, China Red Bull actually owns the Chinese trademark 'Red Bull' (红牛). The Chinese translation of the trademark was registered by China Red Bull itself, giving it the cultural copyright of the translation. Therefore, the 'biological father' Thai Red Bull cannot take away the Chinese logo, nor can it give it to the Austrian Red Bull company. Additionally, from the start, China Red Bull has used different packaging from Thai Red Bull and Austrian Red Bull: both Thai and Austrian Red Bull use silver cans with red narrow stripes, while China Red Bull uses a golden, short, and stout can.

Such differences give China Red Bull more leverage in renewal negotiations. After all, if they part ways, China Red Bull would at most stop using the English name and graphics, but could continue using the Chinese trademark and packaging. If there are also changes and improvements in the formula, it could basically continue selling in the mainland Chinese market.

Nevertheless, the battle between the 'biological father' and 'foster father' of a brand trademark often has a negative impact on the brand. For functional beverages, which rely heavily on advertising and channel distribution, it could ultimately affect sales, lead to layoffs, and even cause decline.

Lessons from Brand Trademark Licensing

1 is Austrian Red Bull, 2 and 3 are China Red Bull

Although the likelihood of China Red Bull changing its name is much lower than JDB, there is another fundamental difference: China Red Bull is a typical Chinese-style approach. Another licensed brand operator, Austrian Red Bull, invests in advertising to promote the Red Bull brand, but consumers buy the cheaper China Red Bull. To some extent, China Red Bull is benefiting without contributing. In fact, Austrian Red Bull invests more in the brand than China Red Bull, whether in advertising creativity, extreme sports, or marketing methods. China Red Bull is leveraging Austrian Red Bull's efforts. From this perspective, Austrian Red Bull is naturally unhappy because it has a joint venture relationship with the trademark owner, and it is reasonable for them not to license to China Red Bull. The free-rider model should be carefully reconsidered and is often unsustainable.

Can the new functional beverage 'War Horse' save the awkward situation?

Facing the unresolved trademark usage rights for Red Bull, Huabin Group urgently needs a new product to replace Red Bull as a fallback, hence the new product 'War Horse' was born. Unlike Red Bull's cans, this vitamin functional beverage uses PET plastic bottles, each 400 ml, available in two versions: one carbonated and one non-carbonated, distinguished by red and blue colors. Many industry insiders believe that the carbonated 'War Horse' can compete with other carbonated brands like 'Monster', 'Hi-Ball', and Austrian 'Red Bull', while the non-carbonated version aims to compete with brands like 'Lehu' and 'Dongpeng Special Drink'. From the packaging, the cool bottle design should appeal to young people, especially gaming enthusiasts.

It is understood that at the end of 2016, 'War Horse' was launched in pilot sales in parts of Jiangsu, Henan, Anhui, Jilin, and Liaoning provinces, and full market promotion began in March this year.

According to insiders, 'The company's strategy for promoting 'War Horse' is to bypass secondary distributors, encourage salespeople to develop terminal outlets, and strengthen visual merchandising. However, if secondary distributors want to stock the product, they will still be supported, but currently there are almost no preferential policies; the price is the same as terminal purchase price, 60 yuan per 15-bottle case, with a retail price of 5 yuan per bottle, meaning a profit of 1 yuan per bottle, which is competitive. Additionally, there is currently a promotion of one bottle free for every case purchased.' 'Recently, we have been taking salespeople to distribute the product, planning to complete regional development by the end of May. This product has higher profit margins, and this year's goal is to develop terminals rather than build sales volume, so the channel task is low, pressure is small, and acceptance is quite good.'

From a marketing perspective, the current materials for 'War Horse' are relatively simple, and terminal promotions mostly just post posters of 'War Horse' and 'Red Bull' side by side to emphasize the connection between the two.

Due to intensifying market competition and the risks of single-product operations, Huabin Group has launched several new products in the past two years, including 'Vita Coco', 'Capri-Sun', and 'Voss', forming a diversified product matrix. From single-brand operations to diversified development, coupled with the advantage of 3 million sales outlets, Huabin Group will see more development possibilities in 2017. However, to fully release these advantages, Huabin Group needs to continuously strengthen market promotion and further improve market layout to open up a broad space for 'War Horse'.

With the Red Bull contract not going smoothly and 'War Horse' launching aggressively, does this mean Huabin's renewal is likely to fail?

Can they break through the crisis?

The Red Bull crisis has created opportunities for other functional beverage brands. In 2017, brands like Dongpeng Special Drink and Lehu are seizing the opportunity to compete for market share, sharpening their knives for the 'bull' and 'sheep'. If Red Bull falls, they are all eager to take over the mantle of the leading functional beverage brand and dominate the market!

Dongpeng launches gold can new packaging

If bottled products have accumulated popularity and reputation for Dongpeng Special Drink and marked the beginning of its youth-oriented approach, the launch of canned products now undoubtedly consolidates the brand's youth strategy. The gold can not only adopts more refined and fashionable youthful elements in packaging design but also targets younger consumers with higher spending power, meeting the diverse consumption needs of the new generation in the context of consumption upgrade. For Dongpeng Special Drink, being youthful is not just about catering to youth culture but understanding the various situations young people face and truly connecting with their inner thoughts.

In addition to upgrading its youth strategy, Dongpeng Special Drink continues to explore and innovate in market development and channels. At the launch event, Dongpeng announced a new market strategy partner mechanism, transforming the relationship between the company and distributors from a simple buying-selling relationship into an economic community. By continuously meeting consumer needs with quality products and steadily increasing market share, it not only helps distributors build sustainable profit systems but also strengthens the relationship between the company and distributors, achieving a win-win situation.

At this time, Dongpeng's launch of the gold can packaging clearly signals its intentions!

Lehu 250ml can with 50% winning rate aims for the top spot

As one of China's leading functional beverage brands, Lehu has seen rapid sales growth in the past two years. In 2015, Lehu captured a large market share in third- and fourth-tier cities and townships with low prices. According to Dali Foods' financial report, Lehu's sales revenue in 2015 was 1.419 billion yuan, a year-on-year increase of 78.7%. In the first half of 2016, Lehu continued to maintain high growth, with sales revenue reaching 1.092 billion yuan, a year-on-year increase of 71.4%.

While Dali's 2016 financial report did not disclose specific sales data for Lehu, it mentioned that in 2016, the group carried out a comprehensive brand upgrade for Lehu. In packaging, the 250ml Lehu product's iron can was upgraded to aluminum, which is less prone to deformation and enhances the brand image. In channels, efforts were focused on special channels (especially schools, internet cafes, bars, etc.), while coverage in traditional channels steadily improved. Currently, Lehu functional beverage has a coverage rate of about 50% in Dali's sales outlets and has achieved excellent sales results in first- and second-tier cities like Shanghai. In 2016, Lehu's sales grew by 43.5%.

Recently, it was learned that the 250ml can Lehu has a high winning rate of 50%, all using the 'one yuan enjoy, two yuan enjoy' method, which not only boosts terminal consumers' strong purchase desire but also further increases terminal owners' profits.

It seems that 250ml Lehu is ready to take the throne of canned functional beverages.

With more and more functional beverage brands, market competition is becoming increasingly fierce. The demand for sports and fatigue relief in China's functional beverage market is too concentrated, leading to severe product homogenization. If innovation is made in functionality and product ingredients, and excellence is pursued, can a benchmark product like Red Bull be created? That may not be accomplished overnight. Brands need to build their own core competitiveness; otherwise, they will be fleeting in the face of changing consumers and markets.

This article is compiled and edited by -END-