---
title: "Reviewing Zong Qinghou's Marketing Philosophy: No Theory, Only Practicality"
description: "On the day Zong Qinghou passed away, I wrote: 'The best way to remember a person is to inherit his thoughts, as in 'carrying on the lost teachings of past sages.' After failing in the new consumption startup wave, I believe new consumption entrepreneurs should learn from old consumption entrepreneurs. Zong is the most worthy of our study, likely without exception. Today, I want to explore several topics: What is the marketing model behind Wahaha's ability to launch multiple hit products? What is the experience of quickly opening markets with new products?"
author: "梁将军"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2024-03-20"
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# Reviewing Zong Qinghou's Marketing Philosophy: No Theory, Only Practicality

> On the day Zong Qinghou passed away, I wrote: 'The best way to remember a person is to inherit his thoughts, as in 'carrying on the lost teachings of past sages.' After failing in the new consumption startup wave, I believe new consumption entrepreneurs should learn from old consumption entrepreneurs. Zong is the most worthy of our study, likely without exception. Today, I want to explore several topics: What is the marketing model behind Wahaha's ability to launch multiple hit products? What is the experience of quickly opening markets with new products?

On the day Zong Qinghou passed away, I wrote a passage:
**"The best way to remember a person is to inherit his thoughts, as in 'carrying on the lost teachings of past sages.'"**
After experiencing failure in the new consumption startup wave, I feel that new consumption entrepreneurs should learn from old consumption entrepreneurs. Zong is the most worthy of our study, likely without exception.
So today, I want to explore several topics with you:
  * What is the marketing model behind Wahaha's ability to launch multiple hit products?
  * What is the experience of quickly opening markets with new products?
  * How did Wahaha defeat competitors? What was Zong's competitive strategy?
  * What can we learn from Wahaha to build a national distribution network?
  * Why has Wahaha maintained its leading position for years, making it hard for rivals to shake?
  * What are the reasons for Wahaha's declining performance today?
**Competitive Strategy: Striking After the Opponent**
**Variation and Fierce Competition, Expanding the Market**
If you want to know whether an entrepreneur is capable, ask his competitors, and you'll get the most reliable answer.
In 1998, a reporter interviewed He Boquan, founder of Robust. The reporter asked: Who do you admire most?
He Boquan replied: "Zong Qinghou of Wahaha."
At that time, Robust and Wahaha were the twin stars of China's beverage industry, having fought for years, and the two founders were both rivals and friends. Why did he earn such high respect from his opponent? How was Zong Qinghou's competitive strategy formulated? What were his principles?
**First Competitive Strategy: "Striking After the Opponent"**
Back then, Wahaha chose the fruit milk track, but Robust was the first to make children's fruit milk and had already gained market share. Moreover, the market's awareness period had passed. But Zong Qinghou believed this was the best time for a company to enter.
Wahaha was very good at entering the market as a latecomer; almost all their products were latecomer strikes.
In 1992, Wahaha launched eight-treasure porridge to compete with Yinlu; in 1996, Zong Qinghou saw the rise of the mineral water category and launched purified water; the same year, they launched AD calcium milk to compete with Robust; in 1998, Wahaha launched Future Cola to compete with Coca-Cola; in 2005, Wahaha launched Nutrition Express to compete with Xiaoyangren... Almost all Wahaha products used a follow-up strategy.
Why did Zong Qinghou consider the follow-up strategy so important?
Because competitors can help you cultivate the market and category, and verify which experiences are pitfalls and which are true. Following competitors into the market is the most efficient.
But this strategy's success has a prerequisite. Because Wahaha had built a strong brand and distribution network, launching a new product was efficient. This prerequisite, combined with the latecomer strategy, allowed Wahaha's products to become hits one after another.
This strategy is very similar to Tencent. When Tencent sees a promising app from an internet company, it immediately replicates a similar one, striking later to surpass you. Tencent Video entered the market later, but now it's in the TOP 3 of China's video sector.
Why can Tencent do this? Because Tencent has money and traffic. First, it has money because it has built a huge capital pool over the years. Second, it has traffic because Tencent is a large internet matrix; it can immediately use massive traffic to promote any product.
Although Tencent and Wahaha are in different industries, their business strategies are the same, so it's said that "Wahaha is the Tencent of the beverage industry." The latecomer strategy may be familiar to many, but the next two strategies may be less known.
**Second Competitive Strategy: "Variation and Fierce Competition"**
Wahaha continuously struck late, taking market share from many. Many saw Wahaha as a hypothetical enemy and tried to seize its market.
These would-be market grabbers often used low-price strategies. "I enter a new market with lower prices than the leader, so I can take your market." What was Wahaha's countermeasure?
When a new entrant or competitor entered the market and lowered prices, they chose not to fight back initially. Zong Qinghou's judgment was: the opponent might be using this product's sacrifice to disrupt your market. If you also lower prices, your market will be in chaos.
When to act? When the opponent has skimmed the market with low prices, they will eventually want to make money and raise prices. When they raise prices, Wahaha suddenly launches a price war. The opponent is caught off guard and begins to collapse.
Because the opponent had made massive price subsidies early on to compete for market share, they had no profits left. When Wahaha then fights a price war, the opponent can't hold on. Many opponents collapsed due to this strategy. Zong Qinghou named this strategy "playing the piano" because playing the piano requires rhythm.
Zong Qinghou often said, we must control the market, not be controlled by it, not be controlled by opponents. The key to controlling opponents is rhythm. When opponents lower prices, avoid their edge, wait for the right moment to strike late, and regain control of the market. This is "variation and fierce competition" and the "piano strategy."
**Third Competitive Strategy: "Expanding the Market"**
At that time, Wahaha's biggest competitor was Robust. Their fierce competition in the market had reached a peak.
Let me give some examples.
In 1994, Wahaha launched a series of fruit milk with six flavors. These six bottles lined up occupied a large retail space, and children could drink six flavors at once, which they loved. This caught Robust off guard.
After being suppressed by Wahaha, Robust wanted to turn the tables.
In 1995, He Boquan, founder of Robust, discovered that about 33% of Chinese children had insufficient calcium intake, so he took the lead in launching Robust Calcium Milk, a product aimed at supplementing children's calcium, and obtained a recommendation from the Chinese Nutrition Society. Robust regained market initiative.
This transformation was crucial because early fruit milk was just yogurt drink, positioned as a leisure beverage, but the emergence of calcium milk shifted the battlefield to functional claims. If a beverage is beneficial to children's health, parents are willing to buy it.
The next year, Wahaha launched AD Calcium Milk in response to Robust's calcium milk. The product concept was that if you want to benefit calcium absorption, you need to maintain health and nutritional balance, so AD Calcium Milk is better. Zong Qinghou also obtained a recommendation from the International Institute of Nutrition.
In 1998, Robust made another surprise move by upgrading the concept, launching "Health Express Yogurt Drink," which was AD Calcium Milk plus bifidus factor, pushing functional claims to the peak. Moreover, it obtained the endorsement of the National Eighth Five-Year Key Scientific Research Achievement and the first health food approval certificate issued by the Ministry of Health. Wahaha couldn't improve efficacy further, so it launched a 200ml large-capacity AD Calcium Milk at the same unit price.
In 1999, Robust responded by launching a similar large-capacity calcium milk, but with some adjustments, developing a series of products like Cyclone Calcium Milk and Granule Calcium Milk. The same year, Wahaha made a breakthrough in nutritional content, launching a new generation product—Wahaha Iron-Zinc-Calcium Milk.
Robust and Wahaha went back and forth, with intense competition. But their war had a clear characteristic: the fruit milk war was fierce, but the two never fought a price war; they only upgraded concepts and products.
Why not fight a price war?
I think this is particularly worth learning for Chinese operators. If you fight a price war with your opponent, the result is definitely a lose-lose situation. Because you have no profit, the opponent has no profit, and you only give consumers cheap prices. But if you innovate and upgrade products, the result is win-win. These two companies, Wahaha and Robust, occupied half of China's yogurt drink market because of their product war.
Why could they achieve this? Because the continuous upgrading and interweaving of concepts kept Chinese consumers and the entire market in an excited state, and the product's decline phase was repeatedly postponed.
What does postponing the product's decline phase mean? Almost any product cannot stay hot in the market forever; it will be a bestseller for a few years, then gradually decline. This is the product life cycle.
As early as 1995, experts predicted that the life cycle of fruit milk was over and it would be replaced by jelly or other puffed foods. But because Wahaha and Robust continuously innovated in nutritional concepts, the experts' predictions failed, and these two products remained bestsellers for years. Even today, AD Calcium Milk still maintains a certain market share, and many people still buy it.
Most importantly, because of their concept war, almost all small players in the market were eliminated.
Around 1994, there were about 10,000 fruit milk companies of various sizes across the country, distributed in various regions, competing with Wahaha and Robust on price. The small players following behind were like lice, annoying the leaders.
But later, the two big companies fought a concept war, doing technical and product upgrades, which almost eliminated all small players. By around 1998, 80% of the companies in the domestic fruit milk market had disappeared, and small players were eliminated.
So you see, truly clever competition is not about life-and-death, but about jointly expanding the market.
Let's summarize Zong Qinghou's competitive strategy: **In product strategy, strike late; in price strategy, vary and fight fiercely; and by competing with key competitors, jointly expand the market.**
**Zong Qinghou's Brand Philosophy:**
**No Theory, Only Practicality**
If I were to express Zong Qinghou's brand philosophy in one sentence, it would be: no theory, only practicality.
How to understand practicality? I think it can be divided into several points:
**1) Practicality = Daring to Challenge Logic Everyone Believes**
Zong Qinghou had many unconventional brand concepts, daring to challenge logic everyone believed. This may be unknown to many.
Let me give a representative example. A president of Coca-Cola once said something very impressive: **"Even if all Coca-Cola factories worldwide were burned down, Coca-Cola, relying on this 'brand,' could stand up again the next day."**
Zong Qinghou didn't quite agree. He said **Coca-Cola might stand up, but not necessarily.**
He said: "For Coca-Cola to stand up again, it needs funds, equipment, talent, and a marketing network. People are willing to provide these because everyone believes Coca-Cola can make money. The premise of making money is not just popularity, but also the combination and configuration of various resources."
There's an example in the Chinese market that proves Zong's point.
In Guangdong, there was a famous brand called Aido, which made VCDs. In just three years, this brand invested about 300 million yuan in advertising and quickly became a well-known home appliance brand in China.
Later, the company went bankrupt due to overexpansion. They owed an advertising agency 20 million yuan. Since they couldn't repay, the agency had to exchange the debt for the brand usage rights of Aido VCD. The agency used the Aido brand to sell products, but it didn't sell at all, and they gave up after half a year.
You see, **having a well-known and strong brand doesn't necessarily help you stand up again.**
Zong Qinghou also had a judgment different from many: brand extension.
Wahaha used the single family brand "Wahaha" for all products, whether children's nutrition liquid, eight-treasure porridge, or AD calcium milk. But international companies believe in positioning theory, which is completely contrary to Wahaha's brand extension theory.
Positioning theory holds that consumer mind resources are limited, and a brand can only represent one category. If a brand represents multiple categories, consumer minds will be confused, and the brand will decline.
The most representative example is P&G. In the shampoo field, Head & Shoulders for dandruff, Pantene for nourishment, Rejoice for smoothness, and Vidal Sassoon for professional styling. P&G used different brands to carve up the shampoo market.
This is the typical case of brand positioning theory advocating brand equals category and multi-brand strategy.
Zong Qinghou believed that multi-brand is good, but you need to know if your company's monetary resources are abundant.
His point was that most Chinese companies face the reality that they don't have enough money or talent to implement a multi-brand strategy. In such cases, trying to attack on all fronts and defeat each one might just be a beautiful wish.
To put it simply, if you want to build a brand now, you might need 10 million yuan and four key managers to solve the problem. But if you split this brand into four product lines, each representing an independent brand, you might need 16 managers instead of 4, and 80 million yuan instead of 20 million.
**Zong Qinghou believed brand extension is good, but it's only beautiful in theory; reality is often harsh.**
**2) Practicality = Not Believing in Any Theory, Adapting to Actual Circumstances**
We've mentioned that Wahaha Group has always adhered to a family brand strategy and doesn't do brand extension. But there are exceptions, and Future Cola is one.
**"Wahaha" and "Future Cola" are both registered trademarks; this is a dual-brand strategy.**
Why is Future Cola different from other Wahaha product lines?
Because considering the strong competitors like Coca-Cola and Pepsi in the Chinese market, neither simple brand extension nor a simple multi-brand strategy was a good choice for Wahaha.
Because Wahaha has an inherent brand impression, entering the powerful cola market, **the past baggage is too heavy, and consumers will have cognitive bias.** But if I don't call it Wahaha today, and just call it Future Cola, using an unknown brand to attack Pepsi and Coca-Cola's market offensive would be too weak. So ultimately, it was called "Wahaha Future Cola." This is Zong Qinghou's adaptability.
Zong Qinghou believed: **"Everything changes and stands; without change, it fails." Brand extension might be a Waterloo in corporate development, but if used properly, it can also become an accelerator for corporate takeoff. The key is how to do it. This is his practical view.**
**3) Practicality = What's Closest to Consumers Is the Most Correct**
**Zong Qinghou's brand practicality also means that what's closest to consumers is the most correct.**
Look, the name "Wahaha" is quite distinctive. How did they come up with it?
Wahaha solicited names from the whole society through local media. Many people submitted names, mostly with characters like "su," "jin," or "bao." Zong Qinghou finally chose a name submitted by Zhu Songling, a director of a children's palace in Shangcheng District, Hangzhou: "Wahaha."
Zong recalled that there were two important reasons for choosing these three characters.
First, two of the three characters in "Wahaha" have the vowel "a," which is the earliest sound children make. Children can easily remember and say this name.
Second, "haha" represents happiness. People of different skin colors and nationalities express joy with "haha." The name "Wahaha" is a name that adults, children, and people of all countries and skin colors can say. So, this name is good.
Let's look at Wahaha's slogans. The children's nutrition liquid slogan is "Drink Wahaha, eat with a good appetite," Nutrition Express's slogan is "Drink a bottle in the morning, be energetic all morning," and Future Cola's slogan is "Chinese people's own cola." All Wahaha slogans are colloquial.
Today, brand concepts have developed for many years, and we think a slogan should be colloquial. But back then, brands were still a rare species in China, and people didn't have such avant-garde brand concepts; they thought brands were highbrow.
Wahaha's competitor during the nutrition liquid period, Apollo, had a brand strategy that was highbrow.
Apollo was the first company in China to do CI, which is corporate visual identity. Today, brand professionals might know this term, but at that time, Apollo spent about 10 million yuan, which might equal 100 million today, on a corporate visual identity system. After that, Apollo's products and brand concepts were very trendy and fashionable.
Its TV commercials on CCTV were also very fashionable. "When the sun rises, our love lasts forever." Many post-70s and post-80s might remember this slogan. So, many people criticized Zong Qinghou, saying his company was too rustic.
Zong Qinghou's thinking at the time was: **Brands are not for looking at; whatever is beneficial to corporate profitability is the way. We are making mass consumer goods closely related to Chinese people, so I can't do it that way. When it's rustic, be rustic together; when it's fashionable, be fashionable together.**
Wahaha's product names and slogans sound rustic, but Wahaha also had fashionable moments. Where was it fashionable? In its commercials.
Back then, many Wahaha commercials were advertising songs, a very forward-looking strategy.
For example, the fruit milk commercial was "Sour, sweet, nutritious, tastes good, drinking daily is really happy, Mom, I want to drink Wahaha fruit milk."
Wahaha purified water's earliest commercial was "My Eyes Only Have You" sung by singer Jing Gangshan, later Wang Leehom's "Loving You Equals Loving Myself." Future Cola's song was "Youth Has No Failure" sung by Taiwan's popular artist Harlem Yu. Wahaha's Very Lemon commercial song was "Good Mood" sung by Coco Lee. These songs sounded very trendy and fashionable at the time.
Zong Qinghou believed: **When it's time to be rustic, be rustic together; when it's time to be fashionable, be fashionable together. You judge what's closest to consumers, and whatever marketing method is correct.**
**4) Practicality = Staying Away from Vanity, Choosing the Most Efficient Resource Combination for Advertising**
Zong's brand practicality also means staying away from vanity and choosing the most efficient resource combination for advertising. I think in the Chinese advertising world back then, advertising was often not just for market competition but also for pride.
For example, when CCTV held advertising bidding, there would be a "bid king." Why was there a bid king?
Because advertising was a scarce resource at the time, so bidding was necessary. The bid king for the liquor category was Qinchui, which spent 320 million yuan a year to win CCTV's bid king. Even today, 320 million is an astronomical figure. Why did everyone frantically compete for this bid king?
According to Qinchui's boss, becoming CCTV's bid king was like driving in a BMW and driving out a Cadillac. The bid king grabbed CCTV's most prime advertising slots, and the ads would be seen by the whole country, creating a huge sensation. Everyone would compete for this fame.
Wahaha also won the bid king once, but later he never emphasized that Wahaha was the bid king. Moreover, he never participated in one advertising bid: the most popular 5-second ad after the News Broadcast, which was a life-and-death battle.
The 5-second ad after the News Broadcast was a resource that liquor and watch companies fought over. Wahaha always fought for the 15-second benchmark after the weather forecast, and it won it for 8 consecutive years, determined to get it every year. Because Zong Qinghou's strategy was to grab effective resources, not the biggest resources.
What's more interesting is that one year, an organization awarded a "China Brand Value Ranking," and Wahaha was at the top. The next year, Wahaha was not on the list. Because Wahaha voluntarily withdrew from the list. **Zong's view was that brand value is not calculated by judges but by the market, so I don't enter this list.**
This is a very practical view. I think he had a consideration: he was afraid that putting Wahaha in such a position would make people inside the company proud and complacent, doing reckless things, which Zong didn't want to see.
Wahaha's market promotion strategy also pursued timeliness and stayed away from vanity. Many people, when attacking a market, habitually spend big money to smash the market, like the bankrupt Aido VCD, which invested 300 million in advertising in 3 years. But Wahaha's new product promotion strategy was different.
Zong Qinghou believed: **In the early stage of a market, you should adopt a bombing strategy because you need to open the market.** Wahaha's early strategy was to buy all prime-time ads on a TV station for a week, a very extreme approach. But once the market startup period passed, his approach was to maintain a certain frequency of exposure on TV, never spending big money on block ads again.
Moreover, Wahaha's advertising was a combination: TV ads built the brand, newspaper ads appealed to function and promotion. When a product first entered the market, they would place high-density, large-space testimonial ads. Image ads were placed in magazines. After the market stabilized, all ads would be reduced, and commercials would be changed to peak-season promotional versions, not mainly image songs. So, its advertising resource combination strategy was also very practical.
**The above is Zong's brand philosophy, summarized in one word: practicality.**
**Practicality equals daring to challenge logic everyone believes, equals not believing in any theory, equals adapting to actual circumstances, equals what's closest to consumers is the most correct, equals deliberately staying away from vanity and choosing the most efficient combination for advertising.**
Having said so much about Zong's practical views, you might think he had no talent in marketing and only won the market through hard work. Actually, you're wrong. Zong Qinghou was a true marketing genius. He once used genius creativity to open Wahaha's Zhengzhou market with only 150,000 yuan, making Wahaha enter thousands of households. He was the first person in China to do testimonial advertising and the earliest to do fan marketing.
Looking back at Wahaha's marketing history, many of Zong Qinghou's thoughts were ahead of the times.
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