Click the image for details Recently, Nongfu Spring rarely disclosed a set of financial data. In 2017, Nongfu Spring's unaudited operating revenue was 16.25 billion yuan, with net profit of 3.369 billion yuan, and net profit for the first half of 2018 was 2.024 billion yuan. This was also the first time Nongfu Spring publicly disclosed its performance, but unexpectedly, this company that sells water and beverages is so profitable. It can be said to be impressively awesome! In contrast, those products that were once very popular, such as Wahaha, also a drinking water brand, are now increasingly unpopular in the market. Another example is White and Black, Hong Tao K, etc., which have also experienced similar fates. Both sell products, but why do some become more popular as they sell? While most gradually fade out of the market or exist only in regional markets? As business managers, how to transcend product limitations and maintain lasting vitality for products is a question that every business manager and marketer must consider. Different thinking leads to different results, reflecting different marketing philosophies: the former embodies brand thinking, while the latter is traditional product management thinking. On the surface, both operate products; but in essence, one operates products, while the other operates users and brands. The core of product thinking is to appeal to functionality, persisting for decades, unaware that functional marketing will hit a dead end as the consumption environment changes. The core of brand thinking is to manage users, let them understand the basic functions of the product, further reshape product value based on users, and ultimately establish relationships with users. Most marketing starts with functional marketing, but a few excellent brands often prefer to empower their brands through value marketing and cognitive marketing. 01 Functional Marketing: The Starting Point for Excellent Brands Famous management theorist Peter Drucker once said: The purpose of marketing is to understand and comprehend customers well, making the product fit the customer and achieve self-sales. To achieve "product fit for customers," many brands often start with functional marketing. What is functional marketing? Take "White and Black" cold medicine as an example. The advertising slogan "Take white tablets during the day to avoid drowsiness; take black tablets at night to sleep well" is something many people still remember even now. In fact, this advertisement listed several effects of "White and Black," such as "cough and fever," "limb soreness and runny nose," "nasal congestion," "sore throat," "sneezing and headache," etc. This is actually functional marketing. To put it directly, it tells you what this product is, what it is used for, and what effects it can achieve! But why do we only remember the slogan "White and Black treats colds, clear distinction, clear effects"? This involves the issue of marketing and user mindset.
Users receive too much information, but it is quickly forgotten. The most fundamental characteristic of the audience is confusion. Even if the brand owner earnestly shouts how good this product is, the audience's final reaction is mostly indifferent. Because we live in an era of information explosion, there are too many similar advertisements, leading to a flood of information trying to enter the audience's mind. Why should they remember you? The second major characteristic of the audience is forgetting. This is why even world-renowned brands like Coca-Cola must maintain huge advertising investments every year. Because the power of publicity comes from repetition, and only repetition can make the brand memorable. Users receive information, but the energy has not yet exceeded the threshold. Just like shopping online, you add a product to your shopping cart but do not place an order. Why? It could be the price, some gifts and delivery services, or a certain function of the product not meeting expectations. In short, it has not yet made you decide to purchase. In other words, the energy that makes you decide to purchase has not yet reached the threshold! Knowing this, it is not difficult to understand why the specific effects of "White and Black" are forgotten, but "take white tablets during the day, take black tablets at night" is deeply remembered. Because, in terms of the advertising slogan, it is short, concise, and vivid, easy for the audience to remember. More importantly, it targets the pain points of urban office workers, related to consumers' expectation of "not dozing during the day and sleeping well at night." But now, we rarely hear about this brand. Why is that? The reason, despite the influence of management and product life cycle factors, is that in terms of marketing alone, the functional marketing adopted by White and Black has inherent defects that are difficult to overcome. First, users receive more and more information, homogenization becomes increasingly severe, and it becomes harder to influence user mindset;
Second, functional marketing is often boring and difficult to attract audience interest and attention, increasing marketing expenses and time costs;
Third, for consumers, functional marketing explains rationality, making their decisions more difficult because there are too many alternative choices in the market;
Fourth, functional marketing is difficult to promote brand upgrading and increase product profit margins. This is why it is often new brands or small brands, or when launching a new product, that use this marketing method. 02 Value Marketing: The Path to Advancement for Excellent Brands From the perspective of product characteristics, beverages are for quenching thirst, laundry detergent for cleaning, clothes for warmth, and cars for transportation. But from a brand perspective, that is not necessarily the case! Why is the white liquor industry classified as Moutai and others? Because Moutai is a social symbol, and its status as the national liquor has built an irreplaceable fundamental value. Similarly, fast fashion brands like ZARA, MUJI, known as the "standard for the middle class," and luxury brands like Hermès, Chanel, Cartier, etc., often do not promote functionality in their marketing but emphasize brand value. Because, in addition to the product itself, the product is also a medium and carrier for user self-expression. In simple terms, functional marketing emphasizes the product itself, making users live for the sake of living; while value marketing emphasizes value, representing desire, attitude, emotion, and identity, making users prove they live better than others! Take Mercedes-Benz as an example. In Mercedes-Benz's promotions, we often see such posters. The poster content is concise, with no excessive text, no relevant parameters or configurations. Even, it might just be an image. What do you associate it with? I think the vast majority of people will associate it with words like "speed," "surpass," and "passion." Another example is Mercedes-Benz's four major authorized tuners. AMG's image in users' minds is "diligent and pragmatic," while Brabus is known for top engine technology and power performance, given the brand image of "high-profile and shocking." Similarly, when talking about Carlsson, many think of "noble blood" and "elegant temperament"; and for Lorinser, many associate it with the praise "luxury in low-key." That is to say, by giving products a sense of value and binding them with related labels, ultimately using value to drive consumer spending. Simply put, it is creating value beyond functionality. This reminds me of Coca-Cola. In fact, Coca-Cola is just a bottle of sugar water. The so-called 100-year mysterious formula is essentially the same as Yunnan Baiyao's claimed "national secret formula," which is just a marketing gimmick. But is Coca-Cola's value only to quench thirst and taste good? NO! As early as during World War II, Coca-Cola announced, "No matter where our troops are, no matter how much it costs the company, we will ensure that every soldier can buy a bottle of Coca-Cola for only 5 cents." So much so that there was a saying at the time, "Why fight? To protect the right and freedom to drink Coca-Cola!" Later, through value marketing, Coca-Cola not only labeled the brand with "happiness" and "joy," but also became a universal social symbol, a symbol of equality and unity. With these, do you still say Coca-Cola is just a cup of sugar water? Also, there is the famous 1947 diamond advertisement "A diamond is forever." From a functional perspective, a diamond is just a hard stone, useless otherwise. So, brand owners naturally do not emphasize the functional value of diamonds. Under the promotion of value marketing, diamond rings have long departed from the product itself, transforming into a symbol of love and an eternal guardian! It is precisely for this reason that diamonds can be sold at prices far exceeding their intrinsic value, captivating young men and women worldwide. For an excellent brand, the product itself must not only carry characteristics and quality but also carry users' self-expression needs and group consensus based on social value. So, when we hear that Apple symbolizes "innovation" and "technology," and Huawei symbolizes "striving" and "struggle," we generally do not object. Only abstract product functions can create strong, positive, and unique brand associations. 03 Cognitive Marketing: The Highest Realm of Marketing Activities Why do the vast majority of European and American consumers prefer McDonald's? That is because when they were children, one of the most familiar brand logos was the golden M. That is, when they were children, McDonald's already regarded them as potential consumers and began cognitive marketing towards them. Have you ever thought about why Nike's "swoosh," initially designed by an art student for only $35, has reached a value of over 200 billion yuan decades later? Because that "swoosh" is no longer just a trademark registered with the industrial and commercial bureau, but a super symbol in consumers' minds. Or, we can call it a brand! A representative example is the Huawei Mate20 series phones released at the end of last year. Regarding this poster, what do you see at first glance? I believe the vast majority see the blurred phone, especially the chip in the middle. Then what do you see at second glance? That's right, it's "Equipped with the first Kirin 980 chip"! Because the font is large and eye-catching. At third glance, I believe you should see the Huawei logo and emblem, or the release date "10.16 London." This is another poster for Huawei Mate20. Unlike the previous one, this poster highlights the "bathroom heater" style triple camera function. Although there are no specific camera parameters, there is no doubt that this promotion attracted a lot of attention. We call this marketing category cognitive marketing. Although consumers do not have detailed knowledge of this product, "Huawei's Kirin 980 or Leica triple camera design" is the brand in consumers' minds. Similar is scenario cognitive marketing. For example, in the 1990s, Brain Gold, with the slogan "This year, don't accept gifts; if you accept gifts, accept Brain Gold," although it did not introduce the ingredients, uses, or effects of Brain Gold, nor emphasize its value attributes, from the scenario description of "gift-giving," consumers already understood that they should give Brain Gold when visiting family during holidays. Why is it that when mentioning Western fast food, people think of the "M" logo? Why is it that under cognitive marketing, Brain Gold becomes a subconscious awareness for consumers, easily building brand loyalty? Fundamentally, it is because these brands have built differentiated cognition among the audience through cognitive marketing. It is precisely because of this cognition that brands are distinguished, and trademarks become indispensable intangible assets! 04 Building Differentiated Cognition: The Soul of Marketing In many cases, functional marketing, value marketing, and cognitive marketing do not exist in isolation but play different roles at different stages of brand development. But, the core purpose is still to build differentiated cognition in consumers' minds! Returning to the case of Nongfu Spring. Initially, the brand's slogan was "Nongfu Spring is a bit sweet." In this slogan, although the brand's purpose was to label itself as "green natural spring water" in consumers' minds, the means used was functional marketing. That is, the product feature of "sweetness"! Later, Nongfu Spring changed its advertising to "We don't produce water; we are just nature's porters" and "What kind of source nurtures what kind of life." On the surface, consumers do not know the specific characteristics of Nongfu Spring, but they have an understanding of the brand proposition of "natural" and "life" conveyed by the brand. Nongfu Spring, through functional marketing and value marketing, allows consumers to have an abstract understanding and association of the brand, ultimately forming differentiated cognition of the brand. So, if you want your product to sell at a higher price, faster, and better, you must nail "a nail" in consumers' minds and build sufficient differentiated cognition. Only when the information received by consumers' minds exceeds the threshold of psychological expectations will they make a purchase decision. Source: Marketing First Page (ID: mkt2000) New Distribution will hold the 2019 (5th) FMCG + Internet Conference during the Chengdu Spring Sugar and Wine Fair from March 15 to March 18. This conference, we will conduct in-depth discussions with many brand owners, supply chain service providers, distributors, retailers, etc., around the topic of "Breaking the Game." Compared to previous conferences, this summit will be fully upgraded. In addition to the original topics such as channel innovation, urban distribution logistics, and distributor transformation, it also adds new marketing cases, IP + FMCG empowerment, community group buying, innovative retail, and other multiple parallel forums. Through three days of ten high-density, high-quality expert sharing and exchanges, we believe every brand owner and distributor can learn the latest business models, expert opinions, and practical methods, finding new tools and methods for their own breakthrough in 2019, and returning to the track of high-speed growth. Review of Previous Conferences -END-