We must recognize that most Chinese enterprises have long been living in hellish torment: surviving year after year, sometimes doing well, but ultimately facing bleak prospects or none at all. Several years ago, I wrote an article titled "How a Marketing Director Is Made." It described the plight of marketing directors: no holidays, no Golden Week, no time to accompany their families, and even with extremely hard work and study, it is difficult to end well. This situation is also the common predicament of all marketing professionals; they want to retire safely from this profession, but even at this stage, that is almost still a luxury. This is not only the living condition of most Chinese marketing professionals, but also the living condition of most enterprises trapped in "sales competition." "Rise and fall overnight" has long been the fate of industry dark horses in China, because they typically win the 4P war, and their so-called victories are bloody and scarred. Due to a lack of technological innovation capability, these enterprises suffer from severe homogenization, and most industries enter a competitive stalemate prematurely. Many enterprises appear to be thriving, but in reality, they have not established any competitive advantage, nor have they completed primitive capital accumulation. Many so-called leading enterprises are not substantially ahead of their followers. Such enterprises live in hellish torment for a long time: surviving year after year, sometimes doing well, but ultimately facing bleak prospects or none at all. 01 Integration Mode ZTE is a typical representative of this hell mode. As a prelude to the Sino-US trade war, if not for the rescue by national power, there is no doubt that ZTE would likely have fallen into a deep crisis. Such enterprises work hard and busily, but others squeeze out the milk, while they themselves eat only grass. Being "favored" by the US government, from an entrepreneurial perspective, the ZTE model is not only blameless, but can even be said to be a brilliant start. But such enterprises eventually fall into and even today still cannot escape the hell mode, whether due to objective or subjective reasons, it is a problem worthy of serious consideration by Chinese enterprises, and also the last chance for survival. This model still has two defects: First, strong system, weak components. Such enterprises use their super supply chain integration capability to surpass their own technological constraints and form scale advantages, but in component production and quality assurance, they find it difficult to win market trust. Second, high market share, but ordinary technology. Due to a lack of independent innovation capability and proprietary intellectual property, despite high market share, they find it difficult to win customer respect. Such Chinese manufacturing allows the world to enjoy the benefits of good quality at low prices, but the world may only regard you as a "world assembly workshop," resent your high market share, and think you have taken its cheese. China's home appliance industry, including those industries that rely on developed countries for core components, generally belongs to this mode. Because they lack core technology and rely too much on price competition, they have no brand support internationally, and although they are welcomed by the market, they find it difficult to win reputation. They are discriminated against and excluded in the international market, and their survival situation is relatively difficult. If they ultimately fail to make breakthroughs in core technology and key components, such "brands" will sooner or later die out. 02 Labor-Intensive Mode Labor-intensive industries mainly include textiles, clothing, luggage, footwear, toys, furniture, plastic products, and other industries. Chinese enterprises have established global competitive advantages in the mid-to-low end of these fields. However, in these industries, because of domestic overcapacity and fierce market competition, in the international market, the high end is blocked by European and American enterprises, and the low end is eaten by other emerging economies, Chinese enterprises are squeezed at both ends. Therefore, although Chinese enterprises have certain comparative advantages, from a strategic and historical trajectory perspective, they also belong to the hell mode of marketing. From the perspective of creating value or material wealth, these enterprises should focus more on product performance and quality. By improving product usefulness and use value, they can improve cost-effectiveness, especially by improving performance and quality to reduce usage costs and increase consumer surplus. Facing the strong brands of European and American enterprises and the step-by-step pressure from emerging economies, China's labor-intensive industries must improve technological innovation capability, upgrade creative capability, and on this basis, through brand building, gradually walk out of the hell mode of marketing. China is a populous country, and from the perspective of employment placement, the strategic value and status of labor-intensive industries are very prominent. How to effectively jump out of the hell mode and enter a sustainable development mode is a problem that must be thoroughly solved to preserve these industries. The social concern about industries transferring to other countries is mainly about these industries. 03 Instant Noodle Mode The instant noodle industry is one of the first industries to rise in China. However, due to a lack of innovation capability, product upgrading (upgrading) is slow, and the entire industry's reputation is not high. From "Master Kong Noodle Master" to Uni-President's "Come One Barrel," to today's popular "One and a Half Bags," they have always relied on affordability to win customers. Hualong has even extended this mode to the drinking water field. Compared with Master Kong and Uni-President, the marketing of Hualong, Baixiang, and other small and medium-sized enterprises all belong to the hell mode—products have long been unable to achieve substantive innovation, and occasional innovations end up abandoning quality and returning to the old path of prioritizing affordability. In fact, even Master Kong and Uni-President are lackluster in product innovation. China's noodle culture has a long history, with many categories and rich variety, offering numerous opportunities for industrialization and huge potential. But the leading enterprises in the instant noodle industry have done nothing, allowing the entire industry to lack innovation for a long time. This situation is also quite common in the food industry and other FMCG industries. Nongfu Spring calls itself "Nature's Porter," and Wahaha has become a "marketing talent." These enterprises have all successfully achieved breakthroughs in category marketing, but have not ultimately established strong product power and brand reputation in their categories. 04 Deep Distribution Mode Deep distribution is an inevitable phenomenon of Chinese enterprises' "sales-centered" approach and enthusiasm for the 4P war. Sales-centered marketing and the 4P war are typical Chinese marketing phenomena. Even multinational companies widely have "marketing within the 4P framework" or "marketing within the product life cycle," but their strategic focus is on product iterative innovation and continuous technological innovation around product reputation. In these aspects, the difference between Chinese enterprises and them is essential. Because the domestic high-end market has been basically monopolized by multinational companies for a long period in the past, and their products are far ahead, what Chinese enterprises have focused on in the past is not so much product innovation as supply level improvement—the level to which enterprises can make products or imitate them, which is probably the so-called "latecomer dividend." In this state, apart from price and promotion (advertising) means that require "hard power," the lowest cost and threshold, and to a certain extent can reflect the wisdom of marketing professionals, is the "deep distribution mode" that integrates sales, market operations, and market promotion. This is also the reason why the deep distribution mode was born in China. There is no doubt that the deep distribution mode is a relatively ideal mode to effectively improve sales performance and avoid enterprises dying together in price wars, promotion wars, and advertising wars. For a long time, it has also largely compensated for the impact of Chinese enterprises' insufficient innovation capability on economic development, maximizing market potential by taking sales to the extreme. When all enterprises use the deep distribution mode to achieve better performance, it evolves into a hell mode that torments enterprises and marketing personnel. Even today, enterprises implementing deep distribution are still swinging between increasing and reducing business personnel, unable to make up their minds. They have to fight positional warfare and strictly guard retail terminals. The purpose of marketing is to make sales superfluous, while deep distribution is to "make sales necessary." The root cause is that the product power of Chinese enterprises is insufficient to make sales superfluous, and due to insufficient product innovation capability, it is also difficult to build a strong brand that makes sales superfluous. 05 Advertising-Led Mode Parallel to the deep distribution mode is the advertising-led mode. The extreme of the advertising-led mode is the Chinese health products industry. By analogy, those marketing behaviors that go beyond products and innovation and bet on brainwashing-style advertising can be roughly classified as the "advertising-led mode." It is undeniable that, based on the vast territory, unbalanced economic development, and the relatively obvious herd mentality of Chinese consumers (low-income people, young people, and the elderly are more easily fooled), advertising, especially those so-called "pain point" ads, even vulgar ads, has played a huge tactical role in marketing for a long time. Once upon a time, the competition for the "bid king" around CCTV was a major event in China's annual marketing, so much so that even today CCTV still boasts of being a national platform for brand building. But the number of "bid kings" that died on CCTV and enterprises that intended to become famous brands through CCTV should be countless. In the advertising field, "brand masters" emerge in endlessly. They set aside meticulous product polishing, technological innovation, and value creation, deliberately ignore the brand foundation, and establish a direct relationship between advertising and brand building. This is also a typical "Chinese marketing phenomenon." Awareness and recognition are one aspect of brand building, even a small aspect. What is crucial for brand building is the enterprise's product power, product reputation, and the decisive technological advantage. Building a strong brand is a long-term process. If you do not strive to create inimitable product and technological advantages, you cannot obtain the strategic space for continuous brand building. As long as enterprise resources are abundant, any enterprise can create awareness through intensive advertising, but only excellent products and continuous product innovation can ultimately support a strong brand. Publicity and communication are indispensable means of brand building, as the saying goes, "Good wine also needs a deep alley." But if there is no "good wine," the higher the awareness, the faster the death. In summary, enterprises that stick to the "hell mode of Chinese marketing" not only face huge strategic pressure, but also have bleak prospects, and in the short term, they continue to sink into vicious competition. To get rid of this situation depends on the attitude and attention of enterprises to technological innovation and product innovation. Under the general trend, it is not too late to mend the fold after the sheep are lost, and it is time to clarify the fundamental issues of Chinese marketing. Source: Sales and Market Magazine Management Edition, Issue 04, 2019 -END-