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Part 2: The Demand Theory of Marketing Competitive Strategy
The demand theory of marketing competitive strategy has two core elements: demand and competition. Philip Kotler, the father of modern marketing and an American marketing guru, defined the basic concept of marketing as "marketing is the activity of satisfying customer needs through exchange." Markets are based on demand; demand is the foundation of all market behaviors. Without demand, there is no market. Theodore Levitt, one of the founders of modern marketing, said, "Customers need holes, not drills," vividly expressing the essence of products: all products are materialized presentations of demand. Shang Yang believes that in any era, enterprises studying and conducting marketing cannot do without insight into consumer demand. Therefore, Kotler's marketing demand theory is a classic marketing theory of cornerstone significance and is never outdated in any era.
However, in today's world of material abundance, product homogenization, and choice overload, it is risky for enterprises to consider only meeting demand. They need to introduce a competitive thinking model and consider whether the demand their products meet has already been fully satisfied by other brands. For example, in the case of braised beef noodles, whether in the market or in public perception, Master Kong has become the representative of "this is the taste." The demand for authentic braised beef noodles has been fully met by Master Kong, leaving no market opportunity for followers meeting this demand. Therefore, from a competitive perspective, meeting differentiated demand and establishing differentiated value perception are other key elements that enterprises must fully consider when formulating marketing strategies.
During the strategic phase when Yangyuan was transitioning from survival to growth, Shang Yang introduced a competitive strategy based on demand insight and differentiated value creation, which played a huge role. The differentiated demand value became the core driving force behind Six Walnut's sales doubling steadily year after year over four years.
At that time, among Yangyuan's multi-product sales of over 300 million yuan, walnut milk accounted for more than 90% of the share, showing a good growth trend in the gift market in Hebei, Shandong, and Henan provinces. The company's resources were also tilted toward this product. At the turning point of the company's development, walnut milk was undoubtedly the dark horse capable of building the brand. Against this backdrop, Shang Yang conducted research from the perspectives of demand and competition, based on the strategic goal of creating competitive advantage.
- Insight into Demand
For insight into potential customers' demand for walnut milk, a fundamental research question was set: Why drink walnut milk? What needs can walnut milk meet for potential customers? Demand insight requires research from two dimensions: the product's own attributes and the potential customers' demand possibilities.
1.1 Interpreting Demand from the Product Perspective
Research from the product's own perspective: Six Walnut walnut milk is an industrially deep-processed walnut product. Walnuts are grown in both northern and southern China. As a nut, the walnut fruit is known as the "king of nutrition," with widespread recognition of its nutritional value, earning it the nicknames "longevity seed," "brain-benefiting fruit," "longevity fruit," and "health treasure." Among its benefits, the main fat component in walnuts is linoleic acid glyceride, which can reduce intestinal absorption of cholesterol. Additionally, these oils can supply the needs of the brain matrix. The trace elements zinc and manganese in walnuts are important components of the pituitary gland, and regular consumption of walnuts is beneficial for brain nutrition. Therefore, the famous Ming Dynasty physician Li Shizhen said that walnuts can "tonify the kidneys, unblock the brain, and benefit wisdom." Modern medical research shows that the phospholipids in walnuts have a good health-preserving effect on brain nerves. Eating 5-6 walnuts every morning and evening can enhance memory and nourish blood and qi. Especially under the influence of China's traditional health culture of "like nourishes like," the brain-boosting properties of walnuts are widely accepted across the country, forming a high level of value perception.
Traditionally, walnuts have been consumed mainly as a leisure snack in the form of roasted in-shell walnuts, followed by candied walnut kernels. Due to the need to crack the shell to extract the kernel and the relatively high price, walnut products have a small share in the leisure food sector, being a niche food with high value and high awareness.
Six Walnut took the lead in using industrial technology to produce a beverage made from walnuts, enriching the forms of deep-processed walnut foods. Its unique "5.3.28" process maximizes the retention of walnuts' natural nutrition while removing the natural astringency, giving the product a fragrant, rich taste and flavor that the public loves. Therefore, with the combined forces of convenience in consumption, taste, flavor, and the price range of mass beverages, coupled with the inherent value of walnuts, Six Walnut, as a beverage-based deep-processed walnut product, has greater potential to become a broad-spectrum mass product. Convenient access to walnut nutrition, good taste, and mass pricing are the value attributes inherent to the Six Walnut product itself.
1.2 Interpreting Potential Customer Demand
The other dimension is the study of potential customers' demand possibilities. Good taste and mass pricing are commonalities of beverages, and these are also common demands of potential customers for beverages, lacking specific research significance. Therefore, the study of potential customer demand possibilities focuses on the need for walnut nutrition.
Among the many nutritional functions of walnuts, brain health and intelligence enhancement are the most widely recognized. However, high awareness does not mean high demand. For example, loquat's lung-moistening effect has some awareness, but typically, a healthy person does not have a strong need for lung-moistening. Therefore, loquat lung-moistening is a case of high awareness but low demand. Thus, for a loquat beverage to become a major category, it would take a relatively long time to cultivate.
Humans are social species, so the analysis of potential customer demand should first be conducted from the macro level of the social environment. Only demands driven by society are strong, stable, and widespread. Coca-Cola, a century ago, was born in the social environment of the late 19th century when the United States was entering the era of industrialization. At that time, the rapid pace of social change led to many new diseases, with patients mostly exhibiting neuroticism and severe psychological unhealthiness. George Beard, in his 1881 book "American Nervousness: Its Causes and Consequences," named this disease "neurasthenia," and those suffering from it were typically well-educated elites with higher social status. In Beard's view, overwork, the pressures of economic ups and downs, mood swings, emotional suppression, and too much intellectual freedom led to intense nervous tension. It was in this turbulent, neurotic America that Coca-Cola, initially marketed as a "nerve tonic," was born. From a nerve tonic to a refreshing drink, Coca-Cola catered to social needs and became the most popular beverage in the United States.
In the information age, intellectual competition has become a significant marker of society. In China, from early childhood education for intellectual development, to the college entrance exam (the "single-plank bridge" for thousands of troops) and various vocational and technical exams, to workplace competition, mental labor runs through almost one's entire life. In today's society, the common belief is that wisdom represents competitiveness. Under such social values, there is a huge demand for products that enhance intelligence and wisdom. Thus, the value proposition of developing brain power and wisdom has become a major driver in the 100-billion-yuan infant milk powder market. Six Walnut, attached to the brain-boosting value of walnuts, aligns perfectly with people's general need for intelligence enhancement. It is this social demand that, once discovered and strengthened, can easily drive a product to develop a stable and lasting market. The aforementioned loquat beverage leverages the serious social factor of air pollution, which is a good starting point and opportunity, but this issue has not yet triggered widespread social concern or formed a broad and lasting perception. Therefore, the formation of a broad-spectrum demand for lung health, relying solely on one company's efforts, is still a long and arduous journey. This also constrains the market development of loquat beverages. If the company wants to turn loquat juice into a mass daily FMCG beverage, it needs precise strategy, seize opportunities from public events, and take time to "cultivate" the market.
At the same time, the demand for intelligence and brain health has no regional differences, no gender distinctions, and no age restrictions. It is a broad common demand with the potential to become a large demand. Shang Yang believes that market size is determined by demand size: the stronger the demand, the easier the market forms; the broader the demand, the larger the market capacity.
It can be predicted that, based on the public's distinct, strong, and widespread demand for intelligence and brain health, as well as the general perception of walnuts as brain-boosting, Six Walnut walnut milk has the potential to create a large market for brain-health functional beverages, meeting people's need for brain health through daily beverages.
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