Click to read the original article for details. In the past two years, I have heard two contradictory voices about consumer brands.

  • Large Western brands say: Business in China is getting harder. FMCG giants like P&G and Mondelez have seen consecutive revenue declines, and Coca-Cola is almost falling out of the Fortune Global 500.
  • Local small brands say: Small brands like Handu Yishe, Three Squirrels, Jiang Xiaobai, and Heytea have become popular nationwide in just a few years. But why is my brand still struggling to survive? You have probably heard the collective anxiety of brand owners: Large brands can no longer arbitrarily block small brands as they used to, and small brands are rushing to the windward, but only a few actually take off. In recent years, why have some small brands successfully broken through despite the encirclement of large brands? And how can small brands ride the wind to fly? The Cyclical Power of Large Brands When you walk into a supermarket and see two skincare products on the shelf, one is L'Oréal and the other is a little-known small brand, which one would you choose? (Just an example; I didn't receive any advertising fees from L'Oréal.) I think most people would choose L'Oréal like me, because L'Oréal is an internationally renowned brand with advertisements seen every day. Choosing it can't be wrong, right? Actually, when you choose a large brand like L'Oréal, your decision is based on indirect evidence, such as industry ranking, brand awareness, advertising investment, and place of origin, rather than direct evidence like ingredients, craftsmanship, or test results. When faced with a consumer product, we usually lack the energy or ability to judge its ingredients, craftsmanship, and other more essential evaluation criteria. Relying on indirect evidence like brand awareness can ensure that we won't make mistakes with high probability. Even though it's possible to misjudge, the small brand might actually be more suitable. Brand is credit; a good brand accumulates credit value in the consumer's psychological account. When shopping, consumers directly use brand awareness to minimize the decision-making cost of analyzing and comparing different products. From this perspective, brand is a very good marketing tool: the better the brand is managed, the higher the credit value; the higher the credit value, the better the sales; the better the sales, the greater the brand awareness. This infinite loop forms a "winner-takes-all" system dynamic. For large brands like L'Oréal, as long as they occupy a credit position in the consumer's mind, they can maintain sales by merely constantly reminding consumers through advertising, making it difficult for small brands to compete. This is the important logic behind how foreign large brands, after successfully occupying the Chinese market in the past century, used massive advertising to consolidate their market position. Brand Credit Is Not the Only Way to Choose Products In recent years, why have some local small brands escaped death and thrived? Although brand credit can help consumers save decision-making costs, it is indirect evidence, not direct evidence. If a brand can provide direct evidence that its products better meet consumer needs, even if the brand awareness is not high, it may break the logical framework of brand credit and re-capture the consumer's mind. For example, Xiaomi was the first to introduce the benchmarking culture into the mobile phone industry. As electronic products, the performance of mobile phones can be directly quantified and compared through benchmark tests. Benchmark scores are direct evidence of phone performance, which is obviously more reliable than indirect evidence like brand awareness and historical sales. Through its benchmarking strategy, Xiaomi further highlighted its high cost-performance ratio, successfully shaking large brands like Samsung and Apple, and even drawing public sarcasm from OPPO's vice president. For marketing, direct evidence like benchmark scores and indirect evidence like brand awareness represent two persuasion methods: the central route and the peripheral route.

The persuasion method relying on direct evidence such as benchmark scores, experimental tests, and raw materials is called the central route;

The persuasion method relying on indirect evidence such as brand, place of origin, sales volume, endorsers, and awards is called the peripheral route. When you judge products through the peripheral route, you usually directly choose large brands and give up comparing and thinking about small brands. This saves you excessive mental effort and allows you to make decisions quickly. However, the peripheral route also has flaws and does not always reflect the true quality and effectiveness of products. A formerly conscientious brand may now be a disappointing brand. Once the consumption expectations brought by brand credit are negatively broken, the flaws of the peripheral route are exposed. Relatively speaking, the central route is closer to the essence and can directly reflect the true quality of products, but it requires you to have sufficient judgment and invest certain effort to make more correct decisions. (Judging the ingredients and craftsmanship of cosmetics is much more difficult and time-consuming than judging brand awareness.) This principle also applies to recruitment. Companies usually prefer to hire students from prestigious schools because the label of a prestigious school is the peripheral route. Although it may not necessarily select truly competent students, it saves recruitment costs and quickly finds people who are correct with high probability. If you want to recruit more accurately, you need to refer to more central routes, such as personality tests, internship inspections, family surveys, and physiological indicators during interviews to judge the authenticity of performance. Obviously, this will cost companies more recruitment costs and be slower. Facing abundant choices, we usually prefer to think through the peripheral route. But brand credit, as a peripheral route, is not the only evaluation standard, nor is it an always-effective screening method. Therefore, small brands have the opportunity to introduce the central route to break through. Consumer Involvement Is the Key to Small Brands' Breakthrough With the development of technology, the role of brands is being gradually replaced by technology.

  • Credit function: In the past, we relied on brand credit to choose products; now we can use third-party evaluations on the internet;
  • Recommendation function: In the past, we chose products based on brand recommendations; now we use internet algorithms to discover better choices;
  • Memory function: In the past, we remembered products through brand symbols and then purchased; now we can search and order instantly;
  • Identity function: In the past, we used brand image to showcase social status; now we... we still need to follow brand image to gain psychological identity. (This may be the only function of brand as a marketing tool in the future that will not be replaced by technology.) But our technology is not yet mature, and the role of brands will continue for several years. When facing powerful well-known brands, we must avoid the scope of large brands' influence, find a new path like Xiaomi's introduction of benchmarking culture, and find our own space to play. Where is the space for small brands to play? Above, we analyzed that large brands use the peripheral route, using brand credit to help consumers save decision-making costs. Consumers can quickly make choices with high probability based on brand awareness alone. This means that when consumers purchase large brands, their involvement is very low. They don't need much thinking or comparison; they can make purchases based on needs and brand memory alone.

Consumer involvement: The effort consumers expend in searching, comparing, and thinking about product information and advertisements during the shopping process. In layman's terms, consumer involvement is not the direct purchase behavior, but the process of thinking about whether to buy, which one to buy, how to buy, and what will happen after buying. L'Oréal alone can make global consumers pay with its annual advertising expenditure of over $8 billion. If you are an unknown small brand, even if you advertise, it's hard to achieve such an effect. (This doesn't mean advertising is useless for small brands, but that small brands' advertising needs higher strategy.) When consumer involvement is very low, large brands have a significant advantage over small brands. But if consumers are willing to actively expend effort when shopping, think and compare different products, and ignore the gap in brand awareness, then brand credit will fail, and small brands will have the opportunity to capture consumers' minds. Just like in the face of benchmark scores, no matter how well-known your phone brand is, you have to compete on the new dimension of benchmark scores. If small brands can introduce more central routes and increase consumer involvement, they are more likely to break through the encirclement of large brands. Large brands usually do not actively increase consumer involvement because their products may not perform better than small brands on certain attributes. Making consumers think more about brand awareness rather than essential attributes will make it easier to maintain the market position of large brands. Unless large brands find that small brands are attacking on these weak attributes. Breakthrough Points to Increase Consumer Involvement Consumer involvement itself consumes more energy, so brand owners cannot control consumers' attention and directly make consumers involved in your brand. But in some cases, the environment can create opportunities that prompt consumer involvement. (1) Focus on unmet or over-satisfied consumer needs This is the opportunity provided by gaps in consumer needs. The evolutionary mechanism of the human brain determines that people tend to save energy and avoid risks when making choices. When there are enough products in the market to meet needs, consumers usually only pay attention to familiar large brands. At this time, consumers process product information with low involvement. But when consumers have needs that large brands cannot meet, they will increase involvement and actively learn about other brands. This is the opportunity for small brands. In the 1980s, P&G was the first to enter China and introduced its multi-brand, differentiated strategy. Since then, the Chinese shampoo market has been monopolized by foreign brands for a long time. When consumers need shampoo, their first thoughts are: for smoothness, choose Rejoice; for dandruff, choose Head & Shoulders; for hair care, choose VS Sassoon; for nourishment, choose Pantene. But facing the glamorous hair advertisements on TV, people with hair loss are devastated. Local brand Bawang seized the opportunity, chose the unique selling point of "anti-hair loss," filled the blank needs of such consumers, and successfully entered the market. In addition to unmet needs, consumers will also actively pay attention to over-satisfied needs. Over-satisfied needs refer to products that exceed actual needs in quality, function, or service, and consumers need to pay extra for these excess parts. In the past, people usually needed to purchase professional software like Photoshop to process images. Although these software are powerful, ordinary users don't need so many functions and find it hard to learn quickly. Meitu Xiuxiu just met this kind of over-satisfied need. Even novices who don't understand image processing can easily get started. Now even phone cameras combine photography and beautification, eliminating the need for Meitu Xiuxiu. (2) Choose emerging channels This is the opportunity provided by channel competition. Small brands that have risen rapidly in recent years generally share a common feature: they all come from emerging channels represented by e-commerce. Xiaomi phones were initially only sold on its official website, Three Squirrels started on Taobao, Chicabel became an internet celebrity brand on Xiaohongshu, and Qiaoshisui almost surpassed international brand Hanzhou in sales through WeChat business. Besides e-commerce reducing middleman margins, what other reasons make it easier for strong small brands to grow in emerging channels? Traditional channels are location-centric; occupying shelves means monopolizing the channel. In the past, Wahaha was said to be the only beverage brand available in remote areas like Xinjiang. But emerging channels like e-commerce are developing faster and faster, with more and more diverse forms, greatly expanding channel capacity. Xiaohongshu's community e-commerce, Pinduoduo's social e-commerce, Miumiu's cross-border self-operated e-commerce... Those traditional large brands find it hard to control these diverse channels as they did before. Even if they spread to all channels, it's hard to lead in every channel. This brings development space for emerging small brands. In such a vast consumer market in China, as long as you can take a leading position in a potential segmented channel, it's enough to support tens of millions in sales. Traditional offline channels are "mountain stronghold thinking": occupying shelves is like occupying a mountain and blocking the forest, without needing extra interaction with consumers. That is, using the channel power of large brands to replace consumer involvement. (Consumers with needs can only go to supermarket shelves and cannot get involved with other small brands.) This sounds scary, but in the era without the internet, this kind of competitive landscape occurred. Because large brands have accumulated higher credit assets in consumers' minds, they can leverage consumer credit to obtain more and better shelf positions in traditional channels. These channels, considering traffic and sales, also tend to choose well-known brands. The emergence of the internet has overturned the "mountain stronghold thinking" of traditional channels. Emerging channels, such as e-commerce and O2O, are "social thinking": besides uploading product information to the internet, they also need to communicate experiences with consumers. Consumers have selfies and sharing, comparisons and reviews, star-chasing and complaints, games and interactions. At this time, consumers can not only buy products but also spontaneously participate in a series of marketing activities. Consumer involvement immediately increases. This partly explains why you don't want to watch supermarket promoter activities, but a 1,500-yuan chopping board introduced by an internet celebrity sold 15,000 units in 10 minutes, and even Wahaha, which has monopolized offline channels for years, has to try emerging channels like e-commerce. Recently, the proposal of "private domain traffic" indicates that the era of "everyone is a channel" has begun. Consumers can directly get involved with merchants, that is, the daily life of private domain traffic owners. The reason emerging channels are more suitable for most small brands is not only because they have social attributes and high consumer involvement, but also because emerging channels need to continuously iterate various new plays to divide the high-quality supply of traditional channels. Small brands want to fight against large brands, and emerging channels want to fight against traditional channels. Your situations are the same, and your goals are the same: trying to increase consumer involvement to gain competitive advantage. If emerging channels like Pinduoduo were as conservative as traditional channels and lacked the social attributes to increase consumer involvement, they would probably have been besieged by offline supermarkets or Taobao long ago. Traditional channels are "mountain stronghold thinking," the era of Channel 1.0; e-commerce that has risen in the past 20 years is "social thinking," the era of Channel 2.0; future channels may be "data thinking." Wherever there are network nodes with data exchange, they will become currency channels, that is, the era of Channel 3.0, where artificial intelligence, the Internet of Things, and big data will be integrated into the entire process of consumer involvement. (3) Provide new interpretation dimensions for consumption behavior This is the opportunity provided by outdated consumption standards. Past consumption behaviors often followed some default standards, which helped our consumption life. With social progress, these standards may no longer adapt to current needs, but consumers still use them due to habit or cognitive fixation. If your brand can break these unreasonable standards and add more reasonable interpretation dimensions, you can refresh consumer cognition and increase consumer involvement. At the same time, you can also nail your brand value into the consumer's mind. For example, as mentioned above, Xiaomi was the first to introduce the benchmarking system, providing consumers with a new interpretation dimension for choosing phones: trust benchmarks over famous brands, and trust Xiaomi over benchmarks. Large brands are usually accustomed to accepting traditional standards because their development is often the result of deep integration with traditional standards. For example, the most successful carriage drivers 100 years ago hated the new species of automobiles because cars overturned the business logic of carriages. Similarly, in the past, the education industry set hourly courses, requiring consumers to participate in learning with whole blocks of time. Now life is increasingly fragmented, and it's hard to have whole blocks of time for classes. At this time, new species of knowledge education represented by apps like Dedao emerged. They restructured knowledge content with 10-minute or 30-minute class hours, filling the need for fragmented time learning. Many people claim that fragmented learning is fake learning. In fact, Dedao is a product that conforms to social progress. Traditional offline large classes in education are a legacy of the agricultural era. In the past agricultural society, transportation was inconvenient, and there was no more efficient knowledge medium like the internet. Every time you attended a private school teacher's class, you hoped to extend the time, because seeing the teacher once might require walking several kilometers. Now it's the information age, the pace of life is accelerating, time is fragmented, and knowledge media have expanded from paper and face-to-face to e-books, videos, and audio. Fragmented knowledge provides a new interpretation dimension for learning methods—not only offline large classes count as learning; fragmented time can also be used for learning. If you think of a new interpretation dimension and want to spread it, you can also use third-party sharing and reviews. For example, Dedao's audio transcripts can be shared on WeChat Moments, e-commerce sites have after-sales reviews, and there are product review sites like "What's Worth Buying." So what aspects might new interpretation dimensions be in? Here are a few examples:

  • Usage method: Dedao's fragmented learning.
  • Design concept: In the past, KTV was usually expensive, with many participants per session, often resulting in microphones being grabbed or singing turning into noisy scenes. Recently, shared KTV provides two-person KTV spaces, meeting the karaoke needs of couples or friends in a corner of a shopping mall.
  • Geographical location: In the past, consumers mostly preferred imported milk powder like Wyeth and Abbott because they believed foreign countries had better pastures and cows. In fact, China's dairy farming industry has basically reached world-leading levels, but consumers still don't buy it. So Feihe Dairy proposed "milk powder more suitable for Chinese babies," turning consumers' understanding of "foreign is better" into "domestic is suitable."
  • Pricing mechanism: In the past, car insurance used uniform pricing, which was not cost-effective for those who don't drive often. In recent years, with the rapid development of AI, IoT, and other technologies, future insurance companies can use these technologies to judge driving habits and make fairer personalized pricing. If a small insurance brand first introduces this interpretation dimension, it may redefine the industry. Summary of This Issue These three breakthrough points to increase consumer involvement are just thinking tools for brand planning. Brand marketing not only needs to learn to use thinking tools but also needs to formulate the most suitable strategy combination based on your own product and business model. The subtlety of application lies in the mind. Consider how your brand can use these thinking tools, whether you can change them, and propose more applicable methods. Source: Zheng Guangtao Grant (ID: Grant-Insight)