Click the blue text above to follow 'FMCG Distributor Professional Consulting' for more marketing and distributor internal management insights.
In 2014, the instant noodle industry faced immense pressure. After Uni-President reported a loss of over 100 million RMB in its instant noodle division for the first half of the year, Master Kong's financial report also showed a loss of $10.62 million (approximately 70 million RMB) in its convenience food segment. Both industry leaders were in the red, and other noodle companies were struggling even more. It was under these circumstances that Uni-President, the industry's second-largest player, followed up its successful 'Laotan Sauerkraut Beef Noodles' with another product innovation: the launch of 'Gemian' in August. The product's name implies 'revolutionizing the instant noodle industry,' showcasing Uni-President's ambition to dominate the market. Readers may wonder: Can 'Gemian' succeed in its revolution? Let's hear marketing expert Liu Jie's in-depth analysis from multiple perspectives.
Product Level
Objectively speaking, Uni-President's product innovation capability is among the best in the industry. Many well-known brands and first-mover products originated from Uni-President, such as the popular 'Fresh Orange Duo' and 'Laotan Sauerkraut Beef Noodles.' The 'Gemian' launched in August features large pieces of real meat and vegetables instead of traditional seasonings, paired with Uni-President's patented 'Butterfly Wide Noodles.' Beyond innovations in noodle texture and ingredients, Uni-President also paid meticulous attention to packaging design, abandoning the traditional style of featuring product images and instead highlighting the 'Gemian' name with artistic, retro illustrations of working people. Its advertising slogans resemble revolutionary-era catchphrases, such as 'Arm Gemian with real ingredients,' 'Meat and vegetables unite for Gemian,' and 'Gemian's duty is to be responsible for noodle eaters.' This is indeed unconventional. Therefore, the choice of distribution channels is crucial to meet consumers' convenience needs. Given Uni-President's marketing capabilities, rapid channel distribution should not be a major issue. However, the problem lies in whether Master Kong, Uni-President's long-time rival, will sit idly by and allow 'Gemian' to quickly enter the market. Master Kong has a history of blocking Uni-President's channels. A well-known case is in the Northeast market, where Master Kong signed 'exclusive agreements' with around 40,000 small and medium-sized supermarkets, effectively shutting Uni-President products out of these outlets. Now, facing the innovative launch of 'Gemian,' Master Kong is likely to imitate or follow up with similar products, but its latest 'killer move' is channel blocking, and this time it will be even more aggressive, as Master Kong cannot quickly replicate or innovate on 'Gemian' in the short term. Marketing expert Liu Jie believes that from a channel perspective, 'Gemian' has a long and arduous road ahead to succeed in its revolution.
Promotion Level
In the food industry, regardless of product category, the sheer variety can overwhelm consumers. For any new product to succeed, in addition to advertising and brand promotion, face-to-face consumer promotions are crucial. Given Uni-President's current strength and marketing expertise, advertising and in-store promotions are not issues. Readers may recall the promotion strategy for 'Laotan Sauerkraut Beef Noodles': besides celebrity endorsement by Hunan TV's top host Wang Han and heavy airtime advertising, Uni-President conducted intensive in-store promotions at major retail outlets, including free tastings, gift-with-purchase, and outdoor shows. In the instant noodle aisle, every major store seemed like a sea of purple (the color of Laotan Sauerkraut Beef Noodles packaging). Marketing expert Liu Jie predicts that the in-store promotion for 'Gemian' will be even more aggressive than that for 'Laotan Sauerkraut Beef Noodles.' Due to the product's novelty and distinctive selling points, competitors like Master Kong may be left 'sighing in admiration' for a long time. Therefore, from a promotion perspective, 'Gemian's' revolutionary success is within reach.
Pricing Level
Currently, according to Uni-President's pricing strategy, the retail price for 'Gemian' is expected to be 7-8 RMB per cup, significantly higher than the mainstream price of 3-5 RMB for cup noodles. Objectively, the high price ensures sufficient profit margins for channel members, which can motivate them to actively promote the product during the launch phase, facilitating rapid distribution and store placement. The downside is that consumers may be slow to accept the higher price in the short term, affecting sell-through. After all, the 3-5 RMB price point for a cup of noodles has become deeply ingrained in consumers' minds (except in special venues like hotels and airports). The 7-8 RMB price for 'Gemian' exceeds consumers' expectations for a cup of noodles, potentially leading to lower acceptance and slower sales initially. However, marketing expert Liu Jie believes that consumers ultimately value the actual product. As long as 'Gemian's' real ingredients and taste can genuinely impress consumers, a price slightly above the mainstream should be acceptable. If the retail price exceeded 10 RMB per cup (too far above expectations), consumer acceptance would be very low even with outstanding selling points. Fortunately, Uni-President has not overestimated its brand power by pricing 'Gemian' above 10 RMB. Therefore, from a pricing perspective, 'Gemian' has a good chance of succeeding.
Of course, readers are well aware that the instant noodle industry is a fiercely competitive 'red ocean,' and the technological barriers are not insurmountable. The 'real ingredients' and 'Butterfly Wide Noodles' of 'Gemian' can be quickly imitated or surpassed. Currently, 'Gemian' is like 'Laotan Sauerkraut Beef Noodles' in its early days—just a step ahead. Eventually, industry giants like Master Kong will quickly follow suit, encircling 'Gemian.' Uni-President must not only compete with Master Kong in brand and channels but also face price competition from second-tier noodle companies that will launch similar products. Therefore, Uni-President's ambition to dominate the industry with 'Gemian' will still be fraught with challenges. Overall, marketing expert Liu Jie believes that 'Gemian' has a better than 70% chance of success. Let's wait and see.
Daonong's PS: Last night, I went to the supermarket to buy a cup of this noodle. I haven't opened it yet, but my feedback from the store is: At the Jinan Uni-President Inzone Dikou Road store, there was a floor display with cut cases at the entrance, priced at a promotional 5.5 RMB, with no clear indication of the original 7 RMB price. The red color stood out among the many displays. If my judgment is correct, the retail price of Uni-President Gemian should be between 5-6 RMB, not the 7-8 RMB widely reported in the media. If any of you have Uni-President contacts, please let Daonong know if the 5-6 RMB price is accurate.
Like this article? Feel free to share it to your Moments by clicking the top right corner.
About Us: WeChat Name: FMCG Distributor Professional Consulting Management Account Introduction: 20 years of experience in FMCG distributor operations and management, specializing in distributor internal affairs: We understand distributors better than manufacturers, and we understand internal management better than distributors. Senior marketing experts help your business grow.
Learning and Exchange QQ Groups:
Group 1: 344257092 (full) ** Group 2: 231512457** Click 'Read the original' below to enter our micro-community for interactive discussions and questions.