---
title: "Why Six Walnut Sells So Well (1)"
description: "This article introduces the stage theory of marketing competitive strategy, using the example of Six Walnut to illustrate that enterprises must survive, develop, and lead in stages, and that positioning and focus theories must be applied according to the enterprise's stage and resources."
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# Why Six Walnut Sells So Well (1)

> This article introduces the stage theory of marketing competitive strategy, using the example of Six Walnut to illustrate that enterprises must survive, develop, and lead in stages, and that positioning and focus theories must be applied according to the enterprise's stage and resources.

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Part 1: The Stage Theory of Marketing Competitive Strategy

I. The Song of the Cicada

French entomologist Jean-Henri Fabre wrote of the cicada: "Four years of hard labor in darkness, one month of enjoyment in the sun—such is the cicada's life." "After four years of digging in the earth, it can now don beautiful clothes, grow wings comparable to birds, and bask in the warm sunlight. What cymbal sound could be loud enough to praise its hard-won moment of joy?" The reason for quoting Fabre's vivid description of the cicada's life is that the development law of enterprises in the commercial society is consistent with the life law of species in nature; both must go through the process from small to large, from weak to strong, from survival to glory. All developing private enterprises in China have a journey like the cicada's, from "digging in the dark" to "growing wings comparable to birds and basking in warm sunlight." The difference lies in the competitive environment and the entrepreneur's vision and courage, which cause the "digging in the dark" period to be longer or shorter than four years. The cruelty of market competition may even prevent some enterprises from seeing the moment of breaking through the darkness. Therefore, the stage theory of marketing competitive strategy, which concerns enterprise development, has profound practical significance.

II. Definition of the Stage Theory of Enterprise Marketing Competitive Strategy

The stage theory of enterprise marketing competitive strategy refers to the adoption of the best strategy and action combination that matches the environment and resources, following the continuous changes in internal and external environments and the enterprise's own resource conditions. Generally, based on indicators such as annual total sales, profit, market share, and industry sales proportion, the enterprise's marketing competitive strategy can be divided into survival stage strategy, development stage strategy, and leading stage strategy. The strategic goals of each stage are different, and the strategies adopted should also differ. Shang Yang believes that the process of enterprise marketing competition is a four-wheel drive process of "product, price, channel, promotion," and the formulation of marketing competitive strategy is a global and directional consideration of the four-wheel drive. Therefore, the stage theory of enterprise marketing competitive strategy covers two core contents: first, the stage of marketing competition is determined by the internal and external environment and resources of the enterprise; second, the whole process is full of changes and forms a sequential order between stages. Thus, the essence of the stage theory of marketing competitive strategy is that the enterprise does the right thing at the right time to ensure the coordination of the four-wheel drive.

The stage theory of enterprise marketing competitive strategy is actually common sense, but common sense is often the most easily overlooked. People see the cicada singing in the sun and wonder why it sings so loudly, but they do not see that the cicada spent four years digging in the dark to have today's song. Today, people see the rapid annual sales growth of Six Walnut and interpret its success in various ways, which is necessary. However, Shang Yang believes that any research on the successful marketing strategic trajectory of an enterprise without considering the enterprise's development history and the overall thinking of the stage theory of marketing competition will be one-sided and partial. Conclusions drawn in this way are prone to overgeneralization and being blinded by a leaf.

1. The Exploration Stage of Wanglaoji Before the "Fear of Getting Heated" Positioning

The most typical example is the red-can herbal tea Wanglaoji, which once created a single-can sales miracle. After being interpreted by positioning theory, people believed that positioning is the whole and only strategy, and that Wanglaoji's success was solely due to the positioning of preventing getting heated. Therefore, it was misunderstood that as long as there is positioning, the enterprise's marketing is no longer a problem, and sales will rise. Undoubtedly, positioning is an important part of Wanglaoji's marketing strategy, but it is not the whole or the only one. Without Mr. Chen Hongdao, the leader who transformed from a beverage distributor to a manufacturer, relying on multiple products such as iced black tea to cultivate the channel network for many years, and without the promotion of the "three red" consumption atmosphere in Wenzhou's catering industry, the positioning of Wanglaoji would have been difficult to establish quickly and play a role in a short time. In other words, from its establishment in 1995 to the introduction of herbal tea positioning in 2003, the marketing of JDB was equally important and worthy of study. This period was precisely an important survival period for a private enterprise. It can be said that without the accumulation of channel resources, team building, and beverage operation experience of JDB in these 9 years, the precise implementation of the later positioning would not have been possible. Therefore, the stage before positioning, like the cicada digging in the dark, cannot be overshadowed by the halo of positioning.

2. The Initial Stage of Yangyuan Six Walnut

Similarly, before the strategic cooperation with Shang Yang in 2009, Yangyuan Six Walnut also experienced a survival period from 0 to 300 million yuan. In 2002, General Manager Fan Zhaolin officially took charge of Yangyuan's marketing, and Yangyuan truly began systematic beverage operation. In the words of General Manager Fan Zhaolin, at that time, Yangyuan, except for a walnut milk product formula, was a small enterprise with "no funds, no team, no market," almost completely poor. In 2008, Yangyuan's total sales reached 300 million yuan, and it took 7 years to survive the difficult period. During these 7 years of survival, Yangyuan's marketing strategy can be summarized as "follow famous brands, multiple products, build channels." As a plant protein beverage, Yangyuan Six Walnut initially followed Lulu, entering the market by leveraging Lulu's popularity in the northern catering and gift markets. The slim can of Six Walnut, the blue tone of the packaging, and the same box style all reflected the "follow" strategy. At that time, an interesting phenomenon was that when consumers wanted to drink Lulu during meals, the waiter would bring Six Walnut. Seeing the blue aluminum can, and after the waiter's introduction, the customer would try it, and if the taste was acceptable, they would not refuse. Initially, Six Walnut shortened the distance with potential customers through such "following," seeking opportunities in the cracks of Lulu's market. At the same time, besides walnut milk, Yangyuan also had products like walnut eight-treasure porridge, walnut almond milk, and apple cider vinegar, forming a multi-product portfolio to reduce the operational risk of the new enterprise.

III. Any Marketing Theory Tool Has Stage Characteristics

Shang Yang believes that for private enterprises in the survival period, "staying alive" is the primary goal. This period can be seen as the enterprise's "grassroots era," with the first priority being how to support the team and channels. Therefore, under the premise of extremely limited resources and non-essential products, following market hot products for multi-product combination is a rational strategy for survival-stage enterprises. Its purpose is to achieve rapid market entry and turnover, get all aspects of the enterprise moving, and sustain the team and channels. At the same time, discover dark horses that can become strategic products and market opportunities. During the 7-year survival period, Yangyuan grew from 0 to 300 million yuan, from resources to team, giving the enterprise a certain ability to resist risks. Among many products, it locked onto walnut milk, which had the best market performance and the largest sales contribution, as the strategic product, laying the foundation for entering the rapid development period. Similarly, during its survival period, JDB selected the herbal tea that performed best in the Wenzhou catering market as its strategic product among many products such as green tea, black tea, eight-treasure porridge, and herbal tea.

American strategy master Michael Porter believes that strategy is embedded in tactics and developed from tactics. "The crucial strategic elements were not premeditated by the founders but were discovered through continuous practice" (Joan Magretta, Understanding Michael Porter). Therefore, when consumption atmosphere, market conditions, and enterprise resource capabilities are insufficient, Yangyuan could not have initially set Six Walnut as its strategic product, focused resources, and created a brain-health functional beverage. JDB could not have initially sold only Wanglaoji and positioned it as a strategic product. These strategic opportunities were discovered and developed in the actual operation of the enterprise. Porter's idea that strategy originates from tactics is exactly the origin of the stage theory of marketing strategy advocated by Shang Yang.

Emphasizing the stage theory of marketing competitive strategy is necessary in the current prevalence of marketing theories such as "positioning" and "focus." In Shang Yang's long-term practice, many enterprises have fallen into blind obedience to positioning and focus theories. They believe that with positioning, they can win the market, without considering whether they are at the stage for positioning, whether they have the ability to communicate and implement positioning, or they rigidly adhere to focus theory, narrowly interpret it, and give up opportunities to expand the market. For Six Walnut, under the "five new" conditions of new enterprise, new brand, new product, new team, and new channels in the survival period, the value of "Use your brain often, drink Six Walnut more" could not be established. At this time, positioning or focusing was meaningless. Under the premise of extreme lack of resources, first, there were not enough communication expenses for value communication and education of potential consumer groups; second, the market takes a long time to accept new products and new brands. If the enterprise only focused on selling one walnut milk, it would be difficult to achieve widespread sales in a short time. How could the enterprise support the team and channels? Therefore, the strategic focus of survival-stage enterprises is to solve the problem of how to survive as soon as possible. At this stage, "positioning" and "focus" are not the primary issues. Therefore, Shang Yang deeply respects this history of Yangyuan. It was the 300 million yuan achieved in these 7 years that laid a good resource foundation, team foundation, and channel foundation for the later success of Six Walnut in creating the large market of brain-health functional beverages.

Shang Yang believes that any method and theory must be applied in combination with actual conditions, otherwise it is useless dogmatism. The stage theory of marketing competitive strategy focuses on the completeness and sequential order of sufficient and necessary conditions for enterprise development. The application of positioning and focus theories must be determined by the enterprise's development stage, industry competition situation, and category attributes. Positioning is not a panacea, nor is it the "third productivity revolution of mankind" as self-proclaimed. When sufficient conditions such as enterprise resources, channels, and scale are insufficient, a positioning alone cannot release energy. At the same time, no matter how good the positioning is, if it cannot produce effects, it cannot solve the enterprise's practical problems. Similarly, JDB's focus model of a single product conquering the world is not the only path to success for all enterprises and industries. Enterprises must not ignore their own stage-specific resource capabilities and industry competition characteristics, and mechanically and simplistically understand and apply positioning and focus theories.

Here are several cases worth warning.

1. Beware of the Hollowing-Out Trap of Positioning

First is the hollowing-out of positioning. Porter believes that "a unique value proposition (i.e., positioning), if not implemented with best practices different from competitors, will not translate into meaningful strategy." The essence of strategy lies in the specific practices of implementing strategy. Positioning is strategy, but if positioning cannot be implemented in the enterprise's operational activities and falls into a hollow state, positioning cannot become meaningful strategy.

A certain Fujian bakery enterprise's brand was positioned as "the expert of pies." This brand was in the third-tier camp in competition. The high-end and professional value of pies had been occupied by Haoliyou, and its market scale was far smaller than Dali. Therefore, relying solely on a conceptual positioning of "expert" to win in a relatively mature bakery market with strong brands was almost impossible. The reason is that in practices such as price, channel, communication, and production, the concept of "expert" could not be implemented. Therefore, this positioning looked beautiful but could not guide the enterprise to produce best practices, nor drive the market, nor become the enterprise's strategy. From the perspective of marketing competition stages, what the enterprise needed at that time was not the "expert" positioning, but how to use product strength and channels to increase its sales scale and expand the enterprise's size. Therefore, without setting strategy from the stage of marketing competition, it is easy to produce this hollow phenomenon where positioning cannot be implemented and play a role. In other words, if positioning is seen as a necessary condition for enterprise development, only when the enterprise has sufficient conditions such as certain resources, channels, teams, and scale will the necessary condition for promoting enterprise development be established and take effect.

2. Beware of Mechanical Understanding and Dogmatic Application of Focus

Second is the mechanical understanding and dogmatic application of focus. The focus theory is based on the simplification of mental cognition and the concentration of advantageous resources. Shang Yang agrees with its strategic guiding significance. However, under the halo of JDB's single-can product selling nationwide, some enterprises, without considering their own marketing stage, industry competition environment, and category characteristics, blindly pursue focus, falling into mechanical understanding and dogmatic application of focus.

A certain enterprise producing ready-to-eat enoki mushroom food achieved good results in Northeast China through several years of market operation, with annual sales of nearly 300 million yuan. However, it faced a sales bottleneck in the Northeast and the problem of how to develop further. At this time, the enterprise had only one single product: bagged spicy enoki mushrooms, mainly sold through circulation channels. At this stage, the enterprise should develop multi-flavor bottled ready-to-eat enoki mushrooms to enter the side-dish field, add popular flavors to the bagged items, use a product portfolio strategy of big single product plus satellite products to increase channel profitability, stabilize channels, develop markets, expand scale, and further consolidate the positioning as the pioneer of ready-to-eat enoki mushrooms. But the enterprise believed it should be like Wanglaoji, conquering the world with a single can, focusing on one bagged spicy flavor. Now, the enterprise's marketing problems remain unsolved, and it is reported that sales are continuously declining.

Why can't this enterprise adopt the strategy of focusing on a single item? First, it is determined by the essential characteristics of the category. Enoki mushrooms themselves have no taste; as an ingredient, they can be blended into various flavors to become a leisure side dish. Wanglaoji, as herbal tea, has its taste determined by the formula. That is to say, enoki mushrooms can have many flavors, but herbal tea is just the taste of herbal tea itself. At the same time, the category attributes are different, and consumers' value orientations are also different: one is eating taste, the other is drinking function. In China, customs vary from place to place, and tastes vary, while the functional orientation is unique. This is one of the reasons why enoki mushrooms cannot focus on a single flavor. Of course, spicy flavor, as a broad-spectrum major flavor, can become a big single product. But focusing on only one flavor violates the essence of leisure side dish food.

Secondly, the enterprise's own development stage and industry characteristics determine that focusing on a single item is inappropriate. This enterprise is the pioneer of ready-to-eat enoki mushrooms. With a scale of 300 million yuan, it can be considered to have initially survived. When competitors have not yet caught up, it should quickly implement market enclosure through product portfolio and expand scale. From the perspective of industry characteristics, the consumption frequency of leisure side dish food is far lower than that of beverages and instant noodles. The category is small, so it should seek scale through product groups. At the same time, in low-threshold industries in FMCG, channel power and terminal control are important competitive factors. This enterprise is a latecomer in the leisure side dish field, and its channel power and terminal control are weaknesses in competition. Leisure food enterprises with channels, terminals, and brands, such as Youyou, can easily overtake. In Youyou's bulk area, there are already small packages of ready-to-eat enoki mushrooms in various flavors. In terms of brand, quality, taste, and convenience, there are enough trust signals to drive consumers to choose at the terminal. This is very dangerous for this enterprise. For FMCG, only with scale can there be brand. Only by breaking the focus on a single flavor, combining multiple items to build channels, expanding consumer breadth, and quickly achieving a certain scale can the enterprise truly establish its positioning as the pioneer of ready-to-eat enoki mushrooms and its competitive advantage. This enterprise ignored the industry essence and the stage of competition, blindly focused on a single item, which is serious dogmatism.

Another case of blind focus is a certain milk tea enterprise. When its cup milk tea was at its peak and in the stage of building sustainable competitive advantage, it should have considered launching bottled PET milk tea to compensate for the seasonal limitations of cup milk tea. At the same time, when competitors began to launch bagged milk tea, it should have quickly launched bagged milk tea to counterattack. But this enterprise mechanically understood focus, believing that multi-item development would have a seesaw effect and negatively affect its cup milk tea. To this day, this enterprise only has cup milk tea as its packaging form, while its competitors have seized a lot of market share with a combination of bagged and cup milk tea. At the same time, with bottled milk tea becoming increasingly popular, this enterprise has lost the opportunity for bottled ready-to-drink milk tea.

Cup milk tea, due to seasonal limitations, drinking method restrictions, and the unsafety of milk tea cups, has reached the ceiling of category development, and sales are difficult to grow significantly. As the pioneer of industrialized milk tea products, this enterprise's brand has the opportunity to become the synonym for the milk tea category, not just cup milk tea. In the eyes of consumers, whether cup, bottled, or bagged, they are all milk tea, just with different packaging forms, drinking methods, and occasions. The products are not qualitatively different. It is meaningless to forcibly establish distinctions through packaging materials in consumers' minds. Over-segmentation and over-focus actually bind the enterprise and lose strategic opportunities in larger markets.

IV. The Stage Theory Is the Necessary Path to Interpret the Market

Every enterprise has different people, times, circumstances, and trends. Regularity and theoretical things must be applied in combination with their own actual conditions. Especially in the Chinese market with a population of 1.4 billion, the economic development, social ecology, and business formats are much more complex than in advanced commercial societies such as Europe, America, Japan, and South Korea. Foreign theoretical models may not fully adapt to China's commercial soil and environment. For example, European and American commercial channels are mainly supermarkets, and wholesale circulation and mom-and-pop stores are almost invisible. But in China, doing FMCG, circulation is an important channel form. Another example is that China is a typical relationship society. Visiting relatives and friends creates a huge gift market. Traditional festivals such as Mid-Autumn Festival and Spring Festival become important sales nodes. Naobaijin succeeded because of this, while in countries like Europe, America, and Japan that advocate individual independence and privacy, the social ecology of human relationships is relatively simple, and such soil cannot produce "Naobaijin" or "Jinliufu." Therefore, it is the richness of channels, the multi-layered nature of the market, and the complexity of consumption that bring survival and development opportunities to Chinese small and medium-sized enterprises. If foreign marketing theories are not critically applied, and if one imitates others blindly, opportunities will slip away in fierce competition. During the survival stage of marketing competition, Yangyuan chose the marketing strategy of "following" and "mixing" (mixed products) to build channels and support the team, and discovered strategic opportunities from it, rather than implementing positioning and focus from the beginning.

Shang Yang proposes the stage theory of marketing competitive strategy: seek survival in the survival period, seek expansion in the development period, and seek maintenance in the leading period. The strategies and paths of each stage depend on internal and external factors such as the enterprise's own conditions and industry competition situation. It may start with addition and then subtraction, unfolding positioning and focus, such as Yangyuan and JDB. It may also start with subtraction and then addition, such as Huang Feihong Spicy Peanuts, which positioned and focused on a single product and a single online channel. After the enterprise survived, it expanded to multiple offline channels, and the product extended from spicy peanuts to multi-flavor and multi-form leisure peanut foods. The stage theory of marketing competitive strategy is that the enterprise follows its own resource capabilities and competitive environment, doing the right thing at the right time, like the dialectical thinking of traditional Chinese medicine, which varies from person to person and prescribes one prescription for one symptom, rather than the standardized and universal thinking of Western medicine, which uses anti-inflammatory drugs for all headaches and fevers regardless of cold or heat. Enterprises must avoid ignoring common sense and developing one-sided and absolute misunderstandings of theories and methods for the sake of rapid development.

Daonong recently opened a public account specifically about how traditional enterprises do WeChat marketing. If you are interested, you can follow it. Search for the WeChat ID above or scan the QR code below to follow.

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