Luckin Coffee uses Maotai flavored milk to ensure that you can drink authentic Maotai

1

Yesterday I wrote about Luckin Coffee’s Moutai Coffee.

Many people asked me in the background what I think about Luckin's so-called Maotai sauce-flavored product, which is made with white wine flavored milk. Is Luckin a scam?

First of all, Luckin Coffee’s official account also released a production video of the flavored milk. This sauce-flavored milk is made with 53-proof Feitian Moutai.

It's a very simple truth. Moutai's official Weibo account has reposted this cooperation. If there is nothing about Moutai in it, but Moutai's name is used, do you think Moutai's legal department is getting paid for nothing?

In addition, my opinion is just like this title. Luckin Coffee can only use the sauce-flavored milk to ensure that everyone can drink authentic Moutai.

When you first hear this sentence, you think it is incredible and outrageous. Why can't he just pour a glass of wine into my coffee? Why make it into flavored milk? This is obviously a play on words.

From a consumer's perspective, of course you hope that he will pour you a glass of Moutai in front of you.

Then the question is, Luckin also knows that you want this.

Then why did Luckin Coffee choose to make flavored milk?

Because Luckin only uses sauce-flavored milk to ensure that you drink authentic Moutai.

I have opened a store myself, and I know what kind of magical things will happen when opening a store.

So I am not surprised by Luckin’s design. What they did was to create the optimal design that balanced risk, benefit and cost.

I believe that most of my readers have worked, or even gone to school, and have done basic experimental design, so I think I can change your perspective and do a small experiment to re-evaluate this project.

You will discover some new highlights.

2

Now, friends, put yourself in the shoes of Luckin Coffee.

Now you are a Luckin employee. You need to write a business product document, or design a project, or design a process plan, or design an assembly line, or design an experiment to let consumers across the country feel the magic of the sauce-flavored liquor.

Your goal is to let everyone spread this news at the most reasonable cost, so that your brand can win everyone's favor, or at least establish the concept of a Chinese fashion brand.

Then you will find that there are several basic objective facts in this project.

1. You want to make this product affordable for people all over the country, and the price cannot exceed that of your regular latte.

2. You hope that the product can be launched nationwide on the same day so that consumers across the country can buy it.

3. You hope that the taste of this product is uniform, and that the taste in different stores is not completely different, so as not to give your competitors an excuse to criticize you.

4. Moutai is different from all other alcoholic beverages. You can think of it as a kind of hard currency, a walking supermarket shopping card, and cash that can be drunk. Its trading market is very mature. The price of a bottle of Moutai is almost half a month's salary for a person in a small place. Even the bottle can be exchanged for money.

5. You have more than 10,000 stores across the country, and there are a large number of franchise stores among them, and the quality of the staff is uneven. There are also many store owners who are your franchisees, and their interests are inconsistent with yours, and they have their own calculations.

6. You don’t want this cooperation to cause any trouble to Moutai’s brand. The trouble here includes the impact on the brand and their sales channels.

Okay friends, these 6 conditions are basic objective facts. These are issues that any brand needs to consider when doing any marketing or doing any business.

Now if you are the person in charge of this project, you need to design a practical plan to choose what raw materials to use, how to use them, how much to use, what form to use, and in what format?

Think about whether the solution used by Luckin Coffee is the optimal solution at the current stage.

Come on, share your own work experience with us and let’s play a thinking game together.

By the way, when making a game, you must remember that these six conditions are mutually restrictive, and your solution must meet all six conditions at the same time.

3

Based on objective facts 1.

It is directly determined that from a cost perspective, Luckin Coffee cannot really pour you a glass of Moutai.

If it is poured in, its selling price will definitely not be the current price, but will be much more expensive.

Since Luckin Coffee is doing cross-border collaboration, it hopes to have the greatest influence on social media and it would be best if everyone could have a cup in their hands. At this time, price will become a major obstacle.

We all know in business that if a product is a little more expensive, the number of people it covers will be reduced by a whole base, and its influence will drop by a base.

At this time, in order to maximize its influence, Luckin must reduce the cost so that more people can afford it and make it a topic of conversation rather than a thing used to distinguish identities.

On the other hand, if he wants to control costs, it is obvious that using formula milk with Moutai as raw material is a better way to control costs, because in order to achieve marketing purposes, the upper limit of its selling price has been fixed, so costs need to be reduced.

For anything, once the cost is determined, there is no way to play with it.

4

Even if we ignore the cost issue for the moment, there are other issues.

Based on objective facts123.

It can be seen that because Luckin Coffee wants people all over the country to be able to buy this kind of coffee, it means that it needs to stock up on a huge amount of goods, and the supply chain pressure here is very great.

And all stores are required to have the goods available for sale on the same day, which makes the difficulty increase exponentially.

When I was a kid, my class organized a spring outing. There were only 50 or 60 people in the class. We hoped that they wouldn't get into any chaos. It was extremely troublesome to organize everyone to gather in the same place and prepare all kinds of materials.

After graduation, I wanted to hold a class reunion. If there was no rich person to pay for everything and asked everyone to pay AA, it would be disgusting to even ask for a fee.

Even now, if you invite your friends and colleagues to have dinner, travel, or play script-killing games, the activities with more than a dozen people will become a mess.

Luckin Coffee plans to do this in 10,000 stores across the country at the same time, facing millions of consumers. You can imagine how difficult this is.

In addition, the proficiency of store employees must also be considered.

At this time, having people operate the wine by hand is far less stable than pouring the flavored milk according to Luckin's SOP.

Because if you only let your employees use flavored milk, then there is no difference between them making thick milk latte or raw coconut latte as usual. The only difference is whether they pour this milk or that milk into the measuring cup. If they change to pouring white wine, then they need to be retrained.

Why do seemingly perfect plans often turn into a mess?

It’s not because there is a problem with the plan, but because various unknown problems will be encountered when the plan is implemented.

Luckin Coffee, which has more than 10,000 stores across the country, has to do one thing at the same time: provide the same service to millions or tens of millions of consumers.

He must reduce the difficulty of this matter to the minimum.

Otherwise he would be asking for trouble, and he didn't want the marketing department to have an idea only to end up in chaos and lose their job.

5

In addition to supply chain issues and operational issues, there is something more important, and that is risk.

Let me say it again, Luckin Coffee can only use sauce-flavored milk to ensure that you drink authentic Moutai.

Based on objective facts 4 and 5.

I believe everyone should be clear about the concept of 53-degree Feitian Moutai.

This product has become a hard currency, it is even a general equivalent. Not to mention that someone is buying Moutai, even the bottles of Moutai you have finished drinking are bought by someone. Just think about this.

Now, as a brand manager, you place such general equivalents in more than 10,000 stores across the country, and stockpile them in large quantities. Most of these stores are franchise stores, and their interests are different from yours. Moreover, the salary of many employees here may be just over a bottle of Moutai.

Let me ask you, what problems do you think may arise here?

Do you think human nature is trustworthy or not in the face of such temptation?

Things like employees suddenly transforming themselves into Moutai heroes and pouring Moutai for customers are minor problems.

The real problem is that many employees will simply take the wine away and hide it, and then not come to work, because as long as they hide a few more bottles, it will be more cost-effective than continuing to work.

He has his experience at Luckin Coffee, so he can just go work in another store. It would be a waste for him not to make this money anyway.

As long as you have ever opened a store, you will know that front-line employee management is a very, very, very difficult thing. It is common sense that there is a high turnover of staff in the service industry.

Don't try to challenge human nature and don't give others too much temptation.

At this point you may say, hey, isn’t there a camera?

Oh, what a coincidence, you should know that many stores are franchised.

Do you think the owners of those franchise stores are not human beings?

Not only will the employees do this, the franchisees will do this too. They would even like to exchange Moutai for rent.

If you have ever been involved in the milk tea industry, you will know that any brand is guarding against franchisees replacing raw materials and selling cheaper products to consumers, resulting in them making money but losing the brand.

Therefore, each brand has a large number of mystery visitors to inspect franchise stores.

If the franchise store really wants to fool you, it’s very simple. Isn’t it just pouring wine in front of you?

You don't know what kind of wine it is.

Most consumers don’t know what authentic Moutai looks like. Wouldn’t it be okay for them to just take fake Moutai, or other sauce-flavored liquors, put them in fake Moutai bottles, and drink them in front of you?

Those who really give you other regular brands of sauce-flavored liquor are considered good people.

Are you afraid that they will give you a big job after the replacement? I was dumbfounded when I saw this on B station recently.

Therefore, Luckin must ensure that the Moutai product is made into flavored milk under its own supervision. After all, a whole bottle of Moutai is a general equivalent. If you try to sell sauce-flavored flavored milk as Moutai, the dealer will advise you to sit at the children's table.

Therefore, in order for Luckin to let you drink the authentic Maotai flavor, it must provide flavored milk instead of the original bottle of Moutai, because the original bottle of Moutai will most likely never reach your hands or your mouth.

Where do those bottles of real Moutai go?

Only God knows.

Wall Street can’t figure out Luckin Coffee, and Luckin Coffee can’t figure out where all the Moutai has gone.

Of course, you might say, can’t we just assign someone to each store to keep an eye on this?

Of course you can, but that would violate condition one and the cost would be out of control.

These six conditions are mutually restrictive.

6

After reading the above 12345, you might say, why don’t I, Moutai, directly provide you with large barrels of liquor, and then you, Luckin Coffee, can’t you just operate it?

Anyway, the production cost of Moutai’s own liquor is not high, and the gross profit margin exceeds 90%.

That is based on question 6.

You have to know that when you drink Moutai, you are drinking wine, but it is more than just wine. It contains some culture, general equivalents on the wine table, and a secondary market for the circulation of these general equivalents.

Moutai’s distributor system is a very strict ecosystem.

At this time, Moutai, as the brand owner, will absolutely not allow any possibility for other organizations to shake up the situation.

At this time, even if Moutai and Luckin Coffee jointly cooperate, Luckin Coffee’s suppliers can only buy the standard bottled products themselves.

It is absolutely impossible for Moutai to officially supply Luckin Coffee in the form of raw materials, because once Moutai does so, the quality of its products will be affected.

Do you understand what I mean?

Just like luxury bags can be sold in luxury stores without any problem. It’s also fine for rich people to buy 100, 1,000 or 10,000 bags at a time.

But if it supplies the same customized fabrics for its bags to Uniqlo, Septwolves, and Heilan Home, it becomes a raw material supplier, and the Septwolves you buy will have the luxury brand's fabric logo on it.

Then at this time, its brand quality will be problematic.

Moutai is facing the same problem: it can compete with Luckin Coffee, but it cannot affect its own brand.

So in the end, Luckin Coffee had no choice but to get Moutai itself and then entrust suppliers to produce flavored milk.

This itself is also a protection for Moutai's brand image.

Okay friends, I believe that you all have basic common sense, and have designed experiments in class or school.

Everyone can evaluate whether this is the case. The six conditions are closely linked. Under the premise of considering cost control, Luckin's thick breast solution almost takes into account all aspects of the solution.

You are also welcome to tell me other new solutions in the comment area, but remember to consider these 6 issues at the same time, because it is very likely that many solutions can only meet some of the problems but will affect other conditions.

Many times, all of this is the art of compromise.

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Official account: BanfoXianren (ID: banfoSB)