After media reports in mid-November 2016 that Robust (Lebus) had been sold by Danone to Yingtou Holdings, the official website of Robust still displayed the Danone Group member logo. It was evident that Robust no longer cared about its brand image; the last website update was in 2011, presenting a desolate scene of abandonment.
According to reports, after holding Robust for 16 years, Danone had not changed its capital-driven approach and decisively dumped this brand that once held a 30% share of the Chinese bottled water market. According to Danone, the move was to focus on natural mineral water business, and since Robust was no longer profitable, it had to be sold. The sale to Yingtou Holdings included the Robust brand and six factories in Guangzhou, Beijing, Tianjin, Chengdu, Chongqing, and Zhongshan, along with their staff.
Since the FMCG market showed a turning point in 2013, on one hand, the industry has seen a decline in both sales volume and profits; on the other hand, personalized beverages that match consumer lifestyles have become popular. In the packaged water segment, natural mineral water has shown strong growth, with new and old brands like Nongfu Spring, Kunlun Mountain, Evergrande Spring, and Kanerjing all using water source as a selling point, launching new products, going high-end, and emphasizing differentiation. Not long ago, the news of Evergrande's exit from the high-end water market was still fresh, and the news of Robust changing owners brought attention back to drinking water brands.
Robust, once regarded as a model of brand operation, indeed embedded a unique selling proposition in consumers' minds: 27-layer purification. However, purification alone is not enough; nutritious elements must be retained, and fresh elements must be added.
Compared to its sibling brand, Mizone is "full of life," bouncing around as the leader in flavored water, while Robust appears "sallow and skinny," almost fading from the market. How to explain this? Is it the old routine of international brands acquiring local brands? That remains unknown, but it is clear that the marketing capabilities behind the two products, Robust and Mizone, are evident at a glance.
It seems that Robust's 27 layers failed to filter out three major marketing mistakes.
** 1**Mistake 1: Lack of Product Concept Innovation
When Mizone was launched in 2003, it was lukewarm for the first few years, as consumers were still observing vitamin-flavored water. The communication concept shifted from "Challenge Limits" to "Out of State? Mizone Brings You Back." In 2016, it attempted community marketing targeting the post-90s generation, proposing "Play with Them." This is a very typical approach of studying consumer lifestyles and insisting on emotional attitude as the direction for product concept communication.
Speaking of water, look at Nongfu Spring's product line: from the differentiated "A Little Sweet" to competing on water source (with old employees as endorsers), segmenting consumer needs (baby water, student water), and competing on packaging design (British designers chose four animals, three plants, and one typical climate feature from Changbai Mountain forest as bottle patterns, accompanied by relevant numbers and text explanations, with each number representing a story).
In contrast, Robust water remains stuck at 27 layers. Not to mention advertising investment, it hasn't even bothered to change its packaging logo for over a decade, presenting a poker face. How can consumption upgrades benefit you?
** 2**Mistake 2: Frequent Changes of Ownership
After the original founders of Robust, including He Boquan, Yang Jieqiang, Wang Guang, Li Baolei, and Peng Yanfen, collectively resigned in 2001, the senior management of Danone Beverages China changed frequently, like a revolving door.
Frequent changes in core leadership, the head of the household, are the most taboo in the FMCG industry. The key is the stability of the marketing team and the consistency of marketing strategy implementation. Without going into details, even the store expenses for distributors can become bad debts because "it was approved by the previous leader." With morale scattered, who would still do terminal sales promotion or negotiate shelf placement?
Look at Mizone: its consistent market strategy of "having fun" with consumers confirms its market position. In 2016, targeting the lifestyle of post-90s consumers, Mizone launched a series of new activities, including "Mizone Play School," a new companion-style communication platform app. While conveying product information, it also shapes a shared context and maintains dialogue with target consumers at any time.
** 3**Mistake 3: Lack of Aggressiveness at the Terminal
Some reports say that Danone pursued annual profits, not hesitating to cut costs and downsize. The result of downsizing was the loss of the drive to "build channels" and "seize the market." The loss of entrepreneurial passion made old Robust employees unable to find the previous feeling of "doing things," and the momentum of capturing large channels like state-owned enterprises was gone, leading to market chaos.
Robust's decline is a fact, while Mizone, visible everywhere, maintains excellent terminal distribution advantages and strong activation, which is also a reality.
Why is Robust water somewhat weak under the same roof?
Logically, it should be the same local sales office and the same distributor handling both. How can the "gap be so big"? Why does the same sales representative favor one over the other? What causes this favoritism? The management's policy formulation may be the most important reason behind it.
At the terminal, Mizone sells for 5 yuan per bottle, while Robust water sells for 1.5 yuan per bottle. Before every salesperson and distributor goes to the market, they calculate in their minds: the competition in bottled water is fierce, and a day's work yields far less than Mizone. The company's assessment method, which only looks at performance and not the process, results in only one outcome: they will go all out to promote Mizone. In short, the core is that the company's assessment standards determine everything.
Opportunities for Robust's Return
Despite the macroeconomic downturn, the drinking water industry is segmenting, and competitors are numerous. However, the reality of upgrading consumer demand still leaves enough space for good products.
The good brand equity accumulated through 27 layers of purification is Robust's inherent advantage for returning to the market. If Yingtou Holdings, which holds the Robust brand, can recognize and utilize this brand equity, the acquisition could be a good deal.
For FMCG, throwing money at building channels only solves short-term problems, not long-term ones. The key is to clarify management standards at all levels. It's not enough to simply invest in channels and package yourself as a second Evergrande. Instead, you should re-sort the product line, deeply understand consumer needs, and, for example, at the product end, Robust needs to re-sort its product line, use super large single products as pioneers, support a group of distributors who identify with the Robust brand, and leave sufficient profit margins in the channels. Leverage the power of distributors to achieve a hot start in key regional markets.
Additionally, and most importantly, by gaining insights into consumer behavior, build incentive mechanisms for enterprises and distributors, achieving a partnership between the enterprise and distributors in the business process. At the same time, introduce a sales management system like ORP to assist in improving frontline staff's in-store hours and working hours, achieving detailed management of store visit management, distributor personnel incentives, and timely expense verification. Let the demonstration effect of flagship stores and key stores continue to amplify, ultimately helping excellent brands return to consumers' lives.
Source: Sales A (ID: realsales)
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