Click to read the original article for details. On June 12, 2019, Zong Fuli, President of Hongsheng Group and Director of Brand and Public Relations at Wahaha Group, was invited to attend the 2019 Zhejiang Business Breakthrough Conference and delivered a speech on the topic of "How Traditional Enterprises Can Awaken Brand Vitality." In her speech, she explained the development and competitive landscape of the beverage industry, shared insights on the relationship between product strength and brand strength for FMCG companies, and how brands can effectively communicate with consumers, reflecting her deep understanding of the beverage industry's development and marketing trends. Below is a full transcript of Zong Fuli's speech, shared for our readers. Hello everyone! I am Zong Fuli. The theme of this conference is very interesting—"Subversion and Rebirth." The purpose of subversion is inevitably reconstruction, and the result of reconstruction is rebirth. In business innovation, there is no establishment without destruction. We are now in a new commercial era impacted by the wave of internet new retail. Many business models are being actively or passively reconstructed, which urges every one of us to view the present from the future and seek innovation amidst change. First, let me talk about the changes. We can summarize the competitive situation in the beverage industry, where Wahaha operates, over the past two decades or so, and identify three keywords. From 1995 to 2003, the keyword was "territory expansion." Companies gained scale advantages through rapid expansion. Wahaha stood out in the industry with its joint sales network. From 2003 to 2013, the keyword was "category competition." By focusing resources and categories to occupy market positions, this stage also saw Nutrition Express become the number one brand in dairy beverages. Around 2014, with the advent of the mobile internet era, the rise of e-commerce, and the evolution of new generation consumer values, the boundaries of "people, goods, and places" in traditional retail were broken. Traditional consumer goods companies are facing challenges of strategic innovation and competitive upgrading. From 2014 to the next decade, I believe the keyword for industry competition should be "winning people." For internet companies, "winning people" is not a new term, but for traditional physical enterprises, building a "consumer-oriented" business model is a marketing exercise from "subversion to rebirth." At this stage, the R&D and marketing of consumer goods companies must revolve around the goal of "winning people." For Wahaha, this means understanding who today's consumers are, where they are, and what products and services they need from us. After 32 years of market experience and consumer cultivation, we have found: The expression of product elements tends to lean towards rational consideration and conceptual explanation, but to "win people," we must lean towards intuition and emotional appeal in brand promotion, and then form stable attraction through conscious feedback from consumers. Specifically, brand communication needs to be carried by solid product value, but in terms of communication form, the brand needs to be personified, making the brand heartfelt and resonating emotionally with consumers. This requires the support of emotional power, such as sentiment and the output of brand values, which is key to enhancing product added value. The organic integration of sensibility and rationality is the key to traditional enterprises winning people. I believe in this saying: "An excellent enterprise has two legs—the left leg is product, the right leg is brand. The strength of the two legs determines how far the enterprise can go, and the coordination determines how steadily it can walk." Of course, most traditional enterprises have undergone market tempering and possess certain product strength advantages. But in the new consumption era, even good wine fears deep alleys. To achieve the goal of winning people through brand communication, enterprises need to think from the following dimensions. First, consumer big data is the foundation for communication between enterprises and consumers. Traditional enterprises do not lack consumer big data, but they need the ability to use big data to empower marketing innovation. In its 32 years of development, Wahaha has formed a brand with full-category beverage production, over a million sales points, and sales scale of tens of billions, accumulating a large amount of market and consumer data. In the future, we will fully utilize this big data to empower product promotion and marketing. In fact, all brands need to understand what consumers think and value, and can no longer rely on omnichannel sales models as in the past. Everything an enterprise does must now be transformed from the consumer's perspective. Wahaha has currently built a "Haba Amusement Park" platform to interact effectively with consumers online. Its function is not only for online activities and selling peripheral products, but more importantly, it values real consumer feedback, which is of great reference value for subsequent activities and product development. Currently, several of our new products have been born from consumer big data feedback on the Haba platform, which then reversely drives the upstream supply chain to conduct R&D and production that match consumer needs. In the future, Wahaha will see more interesting new products that meet consumer demand. Second, as the boundaries between people, goods, and places blur, the main body of future brand marketing will be consumers themselves, and the weight of marketing actions solely targeting products and channels will decrease. Nowadays, young people spend most of their fragmented time on WeChat Moments, Douyin, and various live streaming platforms. Once brand promotion fails to hit their points, it will fall into the embarrassment of "if you're not in the circle, don't force your way in." This fully demonstrates that we have entered an era of personalized consumer sovereignty, where consumer needs and communication channels are increasingly diverse. In marketing tactics, enterprises must also adapt to this change: In the past, we tended to do traditional or outdoor advertising on TV, magazines, airports, and train stations, but now we are more focused on social media and self-media, developing communication methods suitable for these new environments. For example, during the peak season, beverage companies can use promotions like "buy one get one free" to attract people, but attracting people does not necessarily mean winning them, because purchases driven by cost-effectiveness are inherently rational consumer behavior, lacking emotional communication with consumers. If we can add "seasoning" that resonates with consumers in this process, the results will exceed expectations. For instance, in May this year, in Wahaha's "Drink Crystal Water and Win Diamonds" brand activity, we designed a round of "Diamond Guardian" Weibo topic communication, quickly igniting the activity traffic, combining online communication with offline promotion, with very ideal results. Third, innovation is not just about allocating enterprise resources, but about changing resources, using new technologies, products, and organizational forms to change the availability of resources, or even obtain entirely new resources. In the past, the traditional marketing department was responsible for product promotion strategies, but in the internet era, it integrates multiple departmental functions such as market, brand, and public relations, requiring data research, internet promotion, and strategies to integrate online and offline marketing resources, while also integrating various internet resources with internal company resources. Last year, Wahaha changed its marketing department to the Brand and Public Relations Department. On the surface, it was just a name change, but in fact, it clarified that Wahaha will make "consumer and brand orientation" a key enterprise-level task in the future. For example, in the past, Wahaha's market expansion activities across various regions totaled over ten thousand events per month, but the quality was uneven, with many but not refined. Last year, we spent more than two months creating new expansion work guidelines for provincial managers and expansion team leaders in each branch. The assessment requirements for expansion work also changed from previous sales volume and event count assessments to adding indicators such as point development, consumer reach rate, and new media repost rate, focusing provincial market expansion activities on higher-quality and more standardized brand promotion forms. This also made Wahaha's brand image exposure more standardized and reach more efficient. At the same time, our product design team must also connect to the "fashion brain." Currently, more than one-third of the design team are post-90s designers, mostly young designers from the Central Academy of Fine Arts. They have the ability to interpret the aesthetic trends of young consumers. The colorful version of Wahaha came from their design creativity. In the future, with the maturity and popularization of new technologies such as new retail, 5G communications, and AI artificial intelligence, these will also be marketing communication tools that traditional FMCG companies need to pay attention to and leverage. Fourth, in the past, we sold tens of billions of bottles of beverages at a few yuan each, reflecting the value of supply chain system integration. In the future, Wahaha's growth will be the result of the supply chain system innovation and upgrading driven by the completion of the goal of winning people. Evolving from scale competitive advantage to value competitive advantage is the "amulet" for sustainable enterprise development. The traditional advantage of China's consumer goods manufacturing industry lies in having the world's most mature full-industry supply chain system, and competition among brands is often competition in supply chain value. Our business covers various supply chain links such as bottle caps, labels, molds, packaging materials, spices, as well as R&D, logistics, and production line systems, and also includes self-developed production line intelligent robots and strain workshops. These are the foundation for building scale competitive barriers. In the future, Wahaha will also use the consumer big data obtained from winning people to reversely drive innovation and upgrading of the supply chain system, especially in R&D and production, to build value competitive barriers for Wahaha. Of course, regarding the topic of brand renewal, this is a huge and complex systematic project that requires time costs. Strategy has no right or wrong, only whether it is reasonable. As entrepreneurs, we cannot guarantee to be at the forefront every time, and it is difficult to formulate a flawless strategy. This requires entrepreneurs to have a deep understanding and research of the development trends and changes in their industry, and to persist in accumulation, because luck only favors those who are prepared. Source: Food and Beverage Exchange Internal Reference