Today, many traditional marketing methods and brand-building tactics face significant challenges. How can we find a new, lower-cost, and more cost-effective growth solution?
Consumer Demand Generation and Decision-Making Patterns Are Fundamental
For brand marketing, all theories ultimately return to consumer needs and decision-making patterns. The most fundamental aspect of marketing is the consumer—how they think and how they make purchase choices. This is the most basic, underlying logic in marketing. Look at this consumer behavior model: on the far right is the decision-making process. When consumers make decisions, they gather information, compare different brands, and then make a purchase. After purchase, they may share and spread the word. But before a decision is made, a need must first arise, because it is the need that drives the purchase. So where do consumer needs come from? First, from their desires—I want to become a certain kind of person, I believe I am a certain kind of person, and therefore I consume certain products. Second, from specific tasks in their lives. For example, if I'm going on a spring outing today and need to prepare food, I might develop a need for Oreo cookies. This is what we call a specific life scenario, a specific task within a life scenario. These desires and scenarios stem from self-concept and lifestyle: how I see myself and the way I live, which in turn generate specific needs. This self-concept and lifestyle are influenced by both external and internal forces, such as family, social culture, social class, and internal factors like motivation, personality, and emotions. So from a consumer behavior perspective, marketing ultimately aims to solve two problems: First, how to stimulate consumer demand; second, how to influence consumer decisions. Stimulating demand means telling consumers why they should buy this product, what the relationship is between the product and the consumer, and what problems it can solve. This is a very basic question. Influencing decisions means that once a need arises, why choose this brand over others, and how to make your brand the first choice. This is also a problem marketing needs to solve. Traditional marketing tactics focus more on influencing decisions. For example, the advertising case of "妙可蓝多" (Milkground) tells you to choose Milkground when buying cheese, but its marketing does not tell you why you should buy cheese. This is a typical traditional marketing approach, focusing more on influencing user decisions rather than stimulating demand. This traditional marketing method involves two specific steps: First, occupy a category. Second, increase penetration. Penetration includes two aspects: advertising penetration and channel penetration. First, lock your brand into a category and make it the first choice. Then, in advertising, continuously emphasize the association between the brand and the category. In the past, this was typically done through TV and outdoor advertising; now it includes placements on Douyin, Xiaohongshu, etc. Then, penetrate channels by distributing products, opening stores, and running various promotional activities. Why is the traditional marketing approach structured this way? Because we believe the consumer decision logic is "think in categories, express in brands." So we occupy the category and then increase the brand's penetration within that category. This is the fundamental principle behind the traditional approach. For example, when buying beverages, we believe consumers think this way: when they want to buy cola, they first think of Coca-Cola; when they want a carbonated drink, they think of Sprite; when they want a tea drink, they think of Uni-President Ice Tea or Master Kong Green Tea. This is the consumer decision path. But in this path, we find that for large categories, this is very advantageous, but for small categories, this logic is very unfavorable for brands in those small categories. Small-category brands not only need to solve the problem of occupying the category but also how to grow the category. So the growth model brought by this marketing approach is what I call incremental growth from existing market share. Take the cheese example mentioned earlier: if the cheese market is 1 billion yuan in total, and marketing is done very well, achieving a 50% market share means getting 500 million yuan from it. But how to grow the cheese market from 1 billion to 10 billion is a problem traditional marketing does not solve. So it is incremental growth from existing market share.
Category ≠ Demand
Incremental growth from existing market share encounters a big problem. Marketing tells consumers to choose Milkground for cheese, which is fine, but the problem is many consumers do not eat cheese. Because cheese is not a daily consumption habit for Chinese people. So focusing on "choose Milkground for cheese" means you can only take a share of the existing cheese market; it does not bring incremental growth. To get incremental growth, you need to educate consumers on why they should eat cheese. This is a new category problem. A category is just one solution to a need, because there are many categories that can satisfy a consumer's need. For example, when thirsty, you need water, but not only mineral water can satisfy that; other waters, milk, sparkling water, and cola can also satisfy it. So why drink your category? Therefore, category is not equal to demand. In recent years, many new brands have risen, many starting from a growing niche category. As mentioned earlier, Genki Forest started from the niche category of sparkling water, not from cola or herbal tea, because competition in large categories like cola and herbal tea is already fierce. As a new brand, you need to start from a niche category, a blue ocean market. So small categories have their advantages because competition is not intense and the market is blank. But small categories also have disadvantages because their market size and ability to stimulate consumer demand are relatively weak. So for emerging growth brands, besides occupying the category, they must also grow the category. For example, sparkling water: besides telling consumers to choose your brand when buying sparkling water, you also need to tell them why they should drink sparkling water instead of cola. These are two problems Genki Forest needs to solve in its marketing. But the traditional approach cannot create incremental growth. Because traditional methods influence consumer decisions but do not stimulate consumer demand. Without stimulating demand, there is no room for brand growth. So how to stimulate demand? Besides telling consumers to choose Milkground for cheese, you also need to tell them why they should eat cheese, when to eat it, and where to eat it. So it needs to promote "add a slice to your nutritious breakfast" to cultivate the habit of eating cheese. This logic is actually called scenario.
Rediscovering the Path to Brand Growth
Human needs always arise in scenarios. For example, today I need breakfast or lunch, I want to go on a trip, or it's Chinese New Year. In these scenarios, needs arise, and within those needs, consumers choose based on labels. This is the new logic of brand growth. What is the basic thinking behind this logic? Consumer decisions are based on scenarios and labels. For example, let's look at the beverage choice again. When I need breakfast, the likelihood of drinking cola in this scenario is very low because cola does not have the cognitive label for a breakfast scenario. For breakfast, we need nutritious drinks, so we look for drinks with a nutrition label, such as milk, oat milk, or juice, which fit the breakfast scenario. For afternoon tea, cola is acceptable because it's a hedonic drink. In an office meeting scenario, we might feel sleepy and need an energy-boosting drink, so we might drink coffee or Red Bull. So how to comprehensively influence consumer needs and decisions? The answer is—occupy scenarios, attach labels, and achieve growth. This is the new path to brand growth today. First, consider what scenarios consumers are in, and how to attach labels suitable for those scenarios. For example, Mondelez's Oreo, to achieve incremental growth, needs to discover new scenarios like Chinese New Year, outings, afternoon tea, and more. The more scenarios a brand occupies in consumers' lives, the more growth it can achieve. Take OATLY, a typical niche category case. OATLY initially became popular in Europe with a key tactic of creating an environmental protection concept, because environmentalism is a mainstream social thought and value in Europe. So European consumers not only buy its oat milk but also its T-shirts. This is its brand label in Europe. But this tactic does not work in China; it even suffers from cultural mismatch. Chinese consumers have a deep-rooted perception of milk and do not realize they should drink oat milk or plant-based milk. Some even think oat milk is just a fancy soy milk, which is dangerous because soy milk costs only one or two yuan per cup and is only consumed at breakfast. Therefore, for OATLY to grow, emphasizing itself as the "leading brand of oat milk" or "first choice for plant-based milk" is meaningless. This is the biggest problem with the traditional marketing approach of occupying categories. OATLY's real approach in China is to enter coffee shops and launch oat milk lattes, occupying consumer minds through scenarios. This approach first increases brand sales and provides new sales channels; second, it increases exposure and awareness; and more importantly, it elevates the brand's status. Many specialty coffee shops sell a cup of coffee for 30-40 yuan. At that point, telling consumers there is a 10-yuan oat milk in it is acceptable, because in the specialty coffee scenario, consumers have a high acceptance of OATLY's price. There is a statistic: in fiscal year 2021, Starbucks sold 62 million cups of oat milk coffee. OATLY's approach in Europe is "VS Milk," positioning against milk and creating an environmental label. In China, its approach is "+ Coffee," creating a fashion label. The growth path in China is completely different from that in Europe. Today's marketing approach fundamentally lies in how to establish relevance between the brand and consumers. First, through scenarios, associate with consumers' lifestyles and their specific tasks within those lifestyles. Second, through labels, associate with social culture and identity perception, thereby influencing their decisions and gaining new growth sources.
Final Thoughts: Today's marketing has two growth paths: First, incremental growth from existing market share: occupy categories, increase penetration, satisfy consumers' existing needs, and then grab share within the category. Second, incremental growth from new demand: occupy scenarios, attach labels, stimulate new needs, and expand the share of mind. If you are a mature brand in a large category, you can pursue incremental growth from existing market share because the market is large enough; you just need to take a slice of the pie. So for mature brands, dividing the pie is more important than making the pie. But for a growth-stage brand, when you occupy a small or new category, making the pie is more important than dividing it. The customer base is relatively small, so you need to focus on incremental growth, scenarios, and labels.