How does Lao Xiang Ji master marketing?

Lao Xiang Ji's "earthy marketing" is a breath of fresh air in the catering industry. This article starts with Lao Xiang Ji's marketing activities, analyzes the effects of its marketing activities and the logic behind them, and puts forward the difficulties that Lao Xiang Ji is currently facing in its development. Let's learn how Lao Xiang Ji does marketing!

Whenever there is a happy event, Lao Xiang Ji will treat its customers to free meals and never treat their customers as outsiders.

After the National Day holiday, the biggest hot topic in the catering industry is none other than Lao Xiang Ji. In the marketing campaign for the 20th anniversary of Lao Xiang Ji, Shu Congxuan, chairman of Lao Xiang Ji, said in a domineering manner, "At noon on October 8, I will treat people all over the country to chicken."

This move can't help but make many people sigh, Lao Xiangji, you understand traffic! After all, for users, down-to-earth benefits are more touching than big slogans, because they are personal.

So that day, Lao Xiang Ji stores across the country almost became the gathering place for the elderly. But then, Lao Xiang Ji caused dissatisfaction by not allowing take-out, and finally the chairman personally apologized. Topics such as "Lao Xiang Ji invites the whole country to a banquet", "Lao Xiang Ji apologizes", and "Lao Xiang Ji take-out benefits" dominated Weibo's hot searches for many days in a row.

In fact, this is not the first time that Lao Xiangji has held a "free meal" event, but in terms of scale and coverage, this event is unprecedented.

Although everyone knows that this is a marketing trick, it does not stop the villagers from applauding it. When some people find fault with it and complain about Lao Xiang Ji on social media, the villagers will take the initiative to help it fight back.

About ten years ago, Peking University professor Huang Tieying proposed the idea of ​​"You Can't Learn Haidilao", and almost all business schools began to try to dismantle Haidilao's success. However, after studying and learning, everyone found that those brands that tried to imitate Haidilao still had more failures than successes, and few of them broke out of the circle. In the end, it really lived up to the title of the book - You Can't Learn Haidilao.

Today, Lao Xiang Ji’s hot marketing momentum seems to be no less than that of Haidilao in the past. The topic discussions, high traffic, and attention it brings seem to have become the new “unlearnable” in the marketing industry.

At a time when catering consumption is in endless competition, how does Lao Xiang Ji, which frequently appears on the screen, master the art of marketing?

1. Can Lao Xiangji’s marketing campaign be considered successful?

There is really no such thing as a free lunch? This saying may no longer be true.

First, let’s briefly review the timeline of Lao Xiang Ji’s free dinner party - on September 27, Lao Xiang Ji’s chairman Shu Congxuan posted a Weibo announcement to preview the event. In order to build momentum for the event, Lao Xiang Ji also bought a splash screen advertising space on Weibo that day.

At noon on October 8, Lao Xiang Ji fulfilled its promise and launched free meals in all its stores across the country. By 2 p.m. that day, Lao Xiang Ji had given out more than 540,000 free meal packages and 560,000 souvenirs. The meal packages included "one meat, one vegetable, one soup, and one rice", while the souvenirs included "a bottle of Coke, two eggs, and snacks".

On October 9, Lao Xiang Ji launched a "0.01 yuan takeaway flash sale". However, some netizens reported that 100,000 takeaway packages were sold out in seconds, and some were cancelled after being grabbed. Lao Xiang Ji apologized for the incident and then promptly delivered 100,000 packages.

540,000 meal sets, 560,000 bottles of Coke, 1.12 million eggs, about 6-7 million. From a marketing perspective, is this 6-7 million worth it? In the eyes of the New Consumption Think Tank, the result is still worthy of recognition.

Lao Xiang Ji's marketing campaign was successful - it had a sensational effect and was "extremely cost-effective" in terms of communication. On social networks, there were videos on Douyin and analysis by various media outlets. The preview video of Lao Xiang Ji's chairman Shu Congxuan was played over a million times and received over 200,000 likes. This time, Lao Xiang Ji has earned enough face.

In the marketing circle, spending little money to achieve big results is a low-probability event in itself. Judging from a series of effects such as "long queues in stores", "hot searches on Weibo", and overall attention, Lao Xiangji has hit the jackpot this time.

Perhaps someone will have this question: these six or seven million are equivalent to most of Lao Xiangji’s annual R&D expenses. Isn’t this what the old saying “only knows how to market” means?

Behind the free banquet offered by Hometown Chicken, it actually reflects the importance that this national fast food brand places on consumers. In public, its chairman Shu Congxuan has expressed the brand concept of "making friends with consumers" more than once. Although there were some minor incidents during this event, most consumers also gave a lot of positive feedback and interaction.

Competition in the current catering industry is fierce, and similar brands are constantly conducting advertising and refreshing their favorability. In the era of traffic, using different marketing methods to gain user attention is also a key factor that needs to be paid attention to in brand development.

The practice of inviting neighbors to dinner when there is a happy event in the family has also strengthened the label of Lao Xiang Ji as being simple and honest. As the number of such events increased, the restaurant made friends with fellow villagers from all over the country through repeated dinner parties.

2. The reputation and substance of Lao Xiang Ji cannot be separated from Shu Congxuan

Lao Xiang Ji has something in marketing. Not only this incident, but also a few years ago, Lao Xiang Ji has contracted many marketing hotspots in the catering industry many times.

During the Lantern Festival in 2020, Shu Congxuan personally tore up a joint letter from several employees in a video encouraging them to take a pay cut. At that time, many catering brands were laying off employees and postponing payroll due to the pandemic. This move by Shu Congxuan attracted much attention at the time, and his responsibility made everyone see his sincerity and made the brand image more popular.

Not long after the "hand-torn joint letter" was over, Shu Congxuan held another 80s-style press conference with a budget of 200 yuan. Red bricks, earthen walls, a long table covered with red silk cloth, and Shu Congxuan's iconic blue autumn clothes... This press conference was full of earthy flavor, but also very magical. Relevant data shows that the press conference has been watched by 140 million people in total.

After that, Lao Xiangji also signed Yue Yunpeng as its spokesperson, vowing to carry on the "local trend" to the end.

A careful analysis shows that Shu Congxuan, Chairman of Lao Xiang Ji, is indispensable in media advertising, celebrity endorsements, and offline activities. It can even be said that he is the driving force behind Lao Xiang Ji's magical marketing.

Looking back to 2011, Lao Xiang Ji was still known as "Feixi Old Hen". The brand was well-known in Anhui, but was neglected outside the province. At that time, Shu Congxuan found Trout and spent more than 4 million yuan in consulting fees to find a new positioning for the brand, allowing it to stand out among its peers through differentiation. In 2012, the brand was officially upgraded to "Lao Xiang Ji".

Since then, Homemade Chicken has opened up a new world of marketing. A careful analysis of its marketing activities reveals the commonalities behind them:

1. Cleverly grasp the marketing nodes

For example, Lao Xiang Ji took advantage of the epidemic situation and raised the brand's attention. The period after the National Day and the Chinese New Year is a blank period for marketing events. This time, the brand took advantage of the 20th anniversary to carry out a wave of operations, which made Lao Xiang Ji a hot topic after the National Day and the Chinese New Year.

2. Deliberately set up slots to whet the public’s appetite

In fact, in 2022, Hometown Chicken staged a dinner party failure. It was supposed to be a marketing campaign that everyone was happy with, but it went through twists and turns. First, the mini program crashed, which attracted a lot of complaints; then due to a system bug, the original 100,000 free meal coupons were only used up to 183,900.

Finally, Lao Xiang Ji issued a notice announcing that the over-issued meal coupons were real and valid. For a time, comments such as "generous" and "responsible" dominated the comment area. With the over-issued 80,000 coupons, Lao Xiang Ji not only gained exposure and attention, but also established the image of a "responsible brand". Thinking back carefully, is this plot exactly the same as this time?

This kind of activity that gains popularity and attracts users by reversing the pitfalls is generally called bug marketing. Whether it is a script or an accident, Lao Xiangji can turn every bug into an excellent marketing.

3. Promote step by step to give netizens a sense of participation

Lao Xiang Ji attaches great importance to the interaction of netizens. In various marketing activities, the brand intends to let users produce content, thereby triggering social topics and jointly promoting the brand to achieve widespread dissemination.

A former PR person once expressed this view to the New Consumption Think Tank: "For that so-called 200 yuan press conference, I silently listed the costs in my mind from the beginning. This is not something that can be accomplished with 200 yuan. The choices made at the press conference, the exquisite and simple effects, the video delivery, every step is carefully arranged and planned."

On a larger scale, even the hand-torn letter incident a year ago was a carefully planned event. These are all complete marketing events, and they are very well executed marketing events.

4. Be able to put aside your pride and know how to play

Shu Congxuan is very clear that the goal of vigorous marketing is to make more young people like Lao Xiang Ji. He personally took the lead in the full network marketing, and he appeared on various social media, arguing with others or being arguing with others every day. He even gave himself a nickname: "Old Versailles".

Lao Xiang Ji’s daily Weibo activity is not very regular. It often interacts with netizens and chats about gossip. It calls its chairman “Xiao Shu” on social media, which is a true portrayal of a current working social animal and can arouse empathy among young people.

In addition, according to the different tones of each platform, Lao Xiangji has also made different adjustments to its tones. For example, it collects various handsome photos of handsome men with abdominal muscles on Xiaohongshu, and takes the rustic college route on Bilibili.

3. On the issue of opening a store, Lao Xiang Ji is still anxious

Marketing is like a marathon, which requires brands to communicate with consumers over a long period of time. If the story is told well and in an interesting way, it can continue to arouse the interest of consumers.

Having said that, for a catering brand, marketing is important, but basic skills are also important. If the two do not match, the brand will still find it difficult to have the momentum for sustainable development.

To become the leader of Chinese fast food, you must not only pay attention to the surface form, but also work hard on the speed of opening stores, supply chain and other aspects. Whether it is the previous free banquet or this free banquet, the ultimate goal of Lao Xiang Ji is to let more people know the brand and guide them to offline stores for transactions. After all, it is all for business.

First, the IPO application was withdrawn. Then, Lao Xiang Ji started a sideline business of coffee. Behind the lively marketing, we can see that Lao Xiang Ji is still anxious about opening stores.

According to relevant reports, in 2020, Hometown Chicken had nearly 1,000 stores and an annual revenue of 3.454 billion yuan. However, Kung Fu, another Chinese fast food chain, made more than 5 billion yuan from its 600 directly-operated stores in 2019. And until 2022, Hometown Chicken's revenue was only 4.393 billion yuan, and it has never been able to surpass Kung Fu.

From the prospectus, we can also see the multiple anxieties of Lao Xiangji:

1. Although revenue has been growing year after year, profitability is lackluster

From 2019 to 2021, Lao Xiang Ji's net profit attributable to shareholders of the parent company was approximately RMB 159 million, RMB 105 million and RMB 135 million, respectively, showing an overall downward trend.

2. Single product, lack of hits

Despite the introduction of new dishes, Lao Xiang Ji is still best known for its bowl of "chicken soup". Behind the lack of hit products is the dilemma of Lao Xiang Ji's poor R&D capabilities. From 2019 to 2021 and the first half of 2022, Lao Xiang Ji's R&D expenses were 7.1948 million yuan, 14.3854 million yuan, 9.1288 million yuan, and 2.7578 million yuan, respectively, accounting for 0.25%, 0.42%, 0.21%, and 0.14% of total revenue, respectively. Less than 1% of R&D investment does not bring durable product innovation.

Whether Lao Xiangji can continue to attract consumers with a hit product is a difficult problem facing it.

3. Limited to regional development, scalability is hindered

Due to the constraints of the supply chain, Lao Xiang Ji has not yet achieved profitability in markets other than Anhui. Lao Xiang Ji's stores are mainly located in Anhui, Hubei, Jiangsu and other places. As the company's current production and processing base is still mainly in Hefei, Anhui Province, and is limited by the sales radius of fresh and short-life food, Lao Xiang Ji's revenue share in Anhui has always been high in recent years, reaching 67% last year.

Lao Xiang Chicken, which originated in Anhui, has been unable to gain foothold elsewhere.

If you want to improve profitability and brand effect, the first key is naturally the store scale. After all, no matter how famous the brand is or how curious users are, if the store scale cannot keep up and users cannot eat, it will be useless.

The catering industry, which is known for its "first year of prosperity, second years of decline, and a new business in the third and fourth years", has never lacked new players. Lao Xiang Ji, which has made other brands unable to learn from its marketing, also needs to continue to make up for its shortcomings in supply chain and innovation capabilities.

Author: Lele, WeChat public account: New Consumption Think Tank