Should beer learn from baijiu in branding? Hou Xiaohai reveals Snow's 'decisive' strategy. Since 2017, Snow Beer has started a new round of strategic layout. Compared to the capacity layout 20 years ago, this time every pillar laid is a brand. From 'Facial Makeup' and 'Ingenuity' to 'Black Lion White' and 'Mars Green', these new brands, along with Heineken acquired by Snow Beer, form a brand 'dream team'. Against the backdrop of a warming and upgrading Chinese beer market, what impact will this brand strategy have on the industry's 'decisive' landscape? Recently, Snow Beer CEO Hou Xiaohai made a unreserved analysis and elaboration of the Snow brand strategy in the new era. -01- "Brand reshaping is the main body of our business development" Hou Xiaohai stated that over the past three years, brand innovation and change have been the most important part of Snow's transformation and adjustment. "We put brand reshaping first because it is the core weapon, the main means to win the battlefield, and the main body of our business development." At the beginning of 2017, Hou Xiaohai led his team to formulate the "Five-Year Strategy for Snow Beer in the New Era." So far, Snow Beer has completed 80% of the planning progress in three years. On this basis, it will start the strategic implementation of the "New Era High-Quality Development Period" next year. Hou Xiaohai stated that the strategic implementation of these two stages will enable Snow Beer to "transform from an enterprise with large scale but weak quality, nationwide but low profitability, high brand awareness but low brand premium, into a company with high brand value, good profitability, excellent product quality, and strong management capabilities." -02- "Chinese culture is one of the important directions for the brand; the difference is whether you make it more modern or traditional, more fashionable or mature." Regarding the brand strategy behind Snow Beer's intensive new product launches, Hou Xiaohai said that China has become the world's largest beer market. With the rapid development of China's economy, Chinese beer brands should take a unique Chinese path. Specifically, "Ingenuity" is positioned at the high end, highlighting Chinese cultural elements. "The positioning and expression of this brand will be more fulfilling for people aged 35 and above, with a sense of Chinese culture and depth," Hou Xiaohai said. Brands with a sense of history and culture also need to match high quality. "If you say the quality is average, can it become history or culture?" Since Ingenuity beer is related to Chinese culture and Chinese cuisine, it must be designed with a fuller body and strengthen the expression of traditional Chinese culture in packaging design. "Mars Green" targets the main consumer group aged 25-35. These consumers not only have certain quality requirements but also pursue a sense of trend. Based on the characteristics of the target group, Hou Xiaohai defines "Mars Green" as a "product of creative spirit." "Because its target group is the backbone of society, in the age of creation. This brand is emotion-first, product-second." "Black Lion White" is called an "individualized brand" by Hou Xiaohai, targeting consumers' personalized tastes, with packaging design that has a strong European classical style. Hou Xiaohai said, behind the brand is actually the product, and behind the product is actually a group of consumers. The ultimate foothold of the brand is people, groups, and consumption scenarios. "But segmentation of consumer groups is relatively complex. Some like industrial beer, some like craft beer, some like lager, some like ale. The segmentation of consumer groups leads to category segmentation. Each category will also have many different brands." Although these new brands each have their own precise target positioning, the brand thinking behind them is highly consistent. Different target groups require different brand expressions. Hou Xiaohai said, just as "Brave the World" emphasizes emotional communication rather than product description, "because young people care more about emotional communication, whether it is mine; if it is mine, it is better. Although young people also have high quality requirements, they take 'it is mine' as the first element." In this process, the brand must accurately balance physical and emotional attributes. Hou Xiaohai believes that from the macro environment, the rise of national trend is an important trend. The post-90s, post-95s, and post-00s, as internet natives and second-generation natives, are growing rapidly. "This generation of young people has global knowledge and vision, and their life experiences are a combination of international and Chinese. They are unlikely to put foreign brands ahead of Chinese brands. For them, they think foreign brands are good, and Chinese brands are also very good. In fact, they value 'their own' brands more." The rise of national trend also represents the brand direction of Chinese beer. Many Chinese consumer brands should take the Chinese path. Hou Xiaohai believes that Chinese culture is one of the important directions for brands. "The difference is whether you make it more modern or more traditional, more fashionable or more mature." In this regard, Hou Xiaohai believes that baijiu can provide many references and inspirations for beer. Representative famous liquors like Moutai, Jiannanchun, Yanghe Blue Classic, and Qinghua Fenjiu, as well as their packaging and brand slogans, are very "Chinese." He also said: "This is Chinese baijiu culture. It can be said that baijiu has already walked out a successful path of Chinese liquor culture, very successful. But beer still needs to work hard in this regard." "Snow is now mainly based on Chinese elements," Hou Xiaohai said. Brands like "Facial Makeup" and "Ingenuity" are more prominent. "We are doing Chinese elements, and we will launch more Chinese element products." -03- "If Snow only has local brands, it will lose 30% or 40% of the market opportunity for high-end liquor" On the one hand, Snow Beer is strengthening the expression of Chinese elements in local brands; on the other hand, it is also laying out international brands. As Hou Xiaohai said, Snow's brand portfolio follows a combination of Chinese and international routes. "Of course, Chinese is also part of internationalization, and internationalization also needs Chinese elements." "We believe that in the Chinese market in the next ten years, among high-end products, at least half will be Chinese brands and half will be foreign brands. Whether it is 50-50, 40-60, or 30-70, both sides will definitely be present. If Snow only has Chinese local brands, it will lose 30% or 40% of the market opportunity for high-end liquor." Hou Xiaohai said that Snow must have an international brand portfolio. "That is why we cooperate with Heineken." The current Snow Beer brand matrix is a "4+4" combination: "Brave the World superX, Mars Green, Ingenuity, Facial Makeup" are the four major Chinese brands; Heineken, Sol, Amstel, and another international brand come from abroad. This ensures that in every price segment, there are both Chinese and international brands. Hou Xiaohai believes that this "4+4" brand combination represents the market pattern in ten years. "But we must start now. This is dual-wheel drive and dual-direction development to win the final battle." "Building a strong brand group was proposed by us in 2017," Hou Xiaohai said. From a strategic perspective, any final battle ultimately comes down to strategic victory. "If the strategy is wrong, no amount of good tactics can compensate; if the strategy is correct, the quality of tactics and execution only determines whether success comes early or late, long or short." Through three years of layout, Snow has basically completed the strategic preparation for brand upgrading, reshaping, and layout. "In the next three years, we need to sell it well, enter the high-end beer market, and achieve high-quality development." -04- "The cost-effectiveness of brand investment has greatly declined, posing a huge challenge to brand management" "But now there are two problems: first, under the trend of consumption upgrading, brand segmentation is becoming more and more abundant; second, media is becoming more and more fragmented, making it difficult to find a centralized platform." The new brand strategic layout directly brings new challenges to brand management. Hou Xiaohai said that in the segmented and personalized brand layout, it is impossible to promote each sub-brand in the same way. "We implement a project system, that is, PM system. Each brand has a project team responsible for all aspects of the product." Brand expansion means that enterprises also face the challenge of brand investment. "For example, in the past, 10 yuan was enough for Snow only. Now brand investment has increased to 20 yuan, double the previous amount, but now there are four products, and each brand is not more sufficient than before." Media development has further exacerbated this challenge. "In the past, with 100 million yuan, I could do four national campaigns. But in the multimedia and new media environment, investing 100 million is like throwing money away. The cost-effectiveness of brand investment has greatly declined. The challenge to brand management now is very great." Facing the multiple challenges brought by brand expansion, what is Snow Beer's response strategy? Hou Xiaohai said that the design of brand portfolio and brand promotion is crucial. "From brand audience classification to product design, brand portfolio, and promotion arrangement, these aspects must be coordinated." In specific implementation, Snow Beer gives "key promotion" to "Brave the World" and "Mars Green", and "professional promotion" to "Ingenuity" and "Facial Makeup". "Brave the World superX chose to sponsor 'Street Dance of China', a variety show watched by many young people, so Brave the World can gather this segmented audience and make the product explode. But if this product chose 'Flavor of the World', the audience would be completely different, with fewer young consumers." "Mars Green" targets a group that pursues trends and requires "creativity", so the endorsers chosen for "Mars Green" are Jing Boran and He Sui, including cooperation with fashion variety shows and opening M.SPACE pop-up stores. These are the key promotion carriers for "Mars Green" to express its creativity and fashion character, resonating deeply with target consumers. "Ingenuity" chose to cooperate with "Flavor of the World" because "it is crafted with ingenuity, represents tradition, and is related to Chinese food culture and architectural culture," Hou Xiaohai said. According to the product's taste and positioning, its promotion does not necessarily require large investment. Through naming rights for "Flavor of the World" and implementing event promotions like "Ingenuity New Year's Eve Dinner", using self-media platforms for professional promotion can achieve significant results. The professional promotion of "Facial Makeup" is reflected in its combination with Chinese culture and Chinese style, also with a high brand investment-output ratio. "With this planning, my resources are sufficient. Otherwise, if each brand needs 100 million, that would be 800 million, which is unbearable." Hou Xiaohai believes that in the current market environment, one cannot casually talk about traffic. Traffic is only useful for specific things. Traffic is only applicable when the value is high, consumer loyalty is strong, consumer behavior is controllable, consumer awareness is relatively fixed, and product-consumer stickiness is strong. Only then can a traffic pool be formed. Otherwise, it is like 'catching flowing water with hands'. "My understanding of traffic is simple. For 'Ingenuity', it's called making traffic solid; for 'Mars Green', it's called making traffic big." (Some materials in this article are from CMO Training Camp) Source: Yunjiu Team (ID: YJTT2016) Tips will be paid 400-2000 yuan once adopted.