Moutai is a winner! Let’s talk about Luckin Coffee’s integration of quality and luck from the perspective of “soy sauce latte”

Has your circle of friends been flooded with "Jiangxiang Latte" recently? This article is based on the hot topic brought about by the joint venture between Luckin Coffee and Moutai. From the perspective of brand marketing, it interprets the mature methodology of "product and business integration" behind Luckin Coffee's many successful commercial marketing cooperation. It is suitable for those who want to understand brand marketing~

"Good wine and coffee, one cup after another."

On September 4, the "Sauce-flavored Latte" coffee jointly created by Luckin Coffee and Moutai was launched in Luckin stores nationwide. The feature of this coffee is that each cup contains 53-degree Kweichow Moutai liquor, allowing consumers to experience Moutai-flavored coffee.

This was the first collaboration between Luckin Coffee and Kweichow Moutai, and the effect was unexpectedly good. In addition to multiple hot searches on social networks, the coffee also set off a buying spree, with many stores seeing long queues. More than 5 million cups of this coffee were sold that day, with sales exceeding 100 million.

This joint collaboration can be said to be a successful commercial marketing cooperation. Both parties are top brands in their respective fields and each gets what they need.

What Moutai values ​​is Luckin Coffee's massive young consumer group. Through cooperation, it aims to expand its brand influence among young consumer groups and reach some potential young liquor consumers through product flavors.

For Luckin Coffee, this collaboration has transformed consumers' curiosity about co-branded products into actual sales, and has also enhanced Luckin's brand voice and brand power to a certain extent.

This is not the first time Luckin Coffee has used similar marketing. Luckin Coffee has previously collaborated with Coco Tree Coconut Juice to launch new products, and cooperated with well-known IPs such as Sad Frog to launch coffee flavors such as Biluochun and Tieguanyin.

As someone who has been engaged in marketing for many years, everyone believes that Luckin’s marketing is different from previous marketing. It has changed the past brand marketing to a certain extent. Marketing is marketing, which cannot be measured in the short term and cannot bring sales.

1. An internal job transfer case: from brand marketing to user growth

Some time ago, I was chatting with a friend who works in a big company. He had just switched from brand marketing to user growth, and we talked about which position was easier to work in.

At first glance, many people think that brand marketing is easier, because brand marketing focuses on long-term value, and its effect in the short term is difficult to measure. So as long as what you do makes people feel good, it will be fine. It will be difficult for the boss to challenge what you do. After all, the results cannot be measured, so there will be relatively few mistakes.

But this is not the case. In today's world of serious internal competition and quick success, if the effect of what you do is difficult to measure, you have to constantly brainwash your boss. From the perspective of the difficulty of the human brain to accept benefits, the impact of short-term benefits is far greater than long-term benefits. Over time, the boss will become more and more skeptical about brand marketing, and it will become increasingly difficult to carry out work.

As for user growth, at first glance, it represents the pressure of data indicators. It is like sales. You can just look at the data to see whether the target has been achieved. Once the target is not achieved, you will be completely exposed.

But if you think about it carefully, there are only so many ways to increase user growth, and the cost of acquiring customers can also be referenced by historical data. This task becomes a matter of how much money you spend and how much you do. This is essentially a math problem. Even if the goal is not achieved, look at where the problem lies and there is a possibility of improvement through optimization. Judging from the results, the boss will also agree with the logic of the data.

Therefore, in the field of marketing, artistic problems are far more difficult than mathematical problems. The former are vague, while the latter are clear. Anyone can point fingers at the former, but no one will point fingers at the latter as long as the data meets expectations.

My friend's transformation is very representative. He moved from a department where it was not so easy to measure work results to a department where it was very easy to measure work results. One of the reasons for his job change was that the difficulties in brand marketing made his work more and more difficult.

2. The Dilemma of Today’s Brand Marketing

In the past, brand marketing was driven by the market. When the market had demand for products, the brand did marketing, and the brand’s popularity increased, so did the market sales. In the past, market competition was not particularly fierce, and there were usually not many brands in a category on the market, so brand marketing could often produce quick results.

This path certainly still exists today, but more and more brand marketing is beginning to be driven by internal competition.

From an external perspective, brand competition is becoming increasingly fierce. There are many or even dozens of brands in a category. Even large platforms are competing to do similar businesses. If one brand does influential marketing, it is difficult for another brand to sit back and watch. As long as the budget allows, it is very likely that it will quickly follow up and do targeted brand marketing. The annual Double 11 promotion, where major platforms are working hard to make TVCs and launch them on a large scale, is a typical example.

From an internal perspective, brand workers also need to make their presence felt internally and integrate with other departments. Therefore, they need to constantly create buzz and enhance the department’s presence and value within the company through external brand marketing.

This involution actually leads to a problem: the brand marketing activities are increasing, but the investment is decreasing. Because a brand has a limited budget, and because of involution, the brand produces more and more content, naturally there is no more money left for investment.

Over the years, I have seen many large companies and big brands create a lot of brand marketing content, but many of these contents have no money to be released. These brand marketing contents are largely created as passive follow-ups caused by the actions of competitors, or to increase internal presence.

For example, some well-known brands have taken great pains to create a co-branded IP, but because they have no advertising costs, the main marketing action is to send it to the company's internal group, let everyone share it on WeChat Moments, and then find some big names to hype it up and do some interpretation. In essence, this kind of marketing has become an internal draft.

Generally speaking, the cost ratio of content production and delivery in brand marketing should be at least 3:7 or more, but for more and more brand marketing, the ratio is the opposite.

Therefore, for many brands, because they are passively forced to do marketing, they often do it for the sake of doing it, without investing, wasting budget.

The second problem is the long-standing problem of brand marketing, which is the inability to measure the effect and bring in sales. This problem has been explained above, so I won’t expand on it here.

3. Combination of brand marketing and operation

Since the concept of Internet operation emerged, its series of operational actions with measurable effects have brought a lot of inspiration to the marketing industry, but overall, marketing and operation are still separate.

Generally speaking, brand marketing only focuses on placement and exposure, regardless of the contract. Brand marketing may bring in a group of new users, but the brand does not know where these users are, and will not carry out targeted marketing for them in the future.

Operations are mainly about taking over existing traffic and users, achieving data goals, and doing post-operations. They generally don’t care much about what users ask for.

With the evolution of time, marketing began to gradually combine with operations. Especially after the birth of the concept of private domain traffic, it became a concept that integrates marketing and operations. Whether private domain traffic belongs to marketing or operations, in fact, it belongs to both marketing and operations.

The essence of private domain traffic is to bring users to the platform through marketing, and then ensure long-term operation and monetization through operations.

4. How does Luckin Coffee integrate product quality and business?

Yang Fei, the marketing director of Luckin Coffee, once proposed a concept called "brand-operation integration", which is actually the combination of brand marketing and user operation, or you can call it "operation integration". For a brand like Luckin, it is naturally suitable for such a marketing method.

First of all, Yang Fei comes from a brand public relations background, so he naturally knows the long-term value of brand investment. His understanding of brands is top-notch, so he can push the company to spend a large budget on brand marketing and increase brand awareness. For example, Luckin Coffee spent 746 million yuan on marketing in 2022. Although the expenses cannot be broken down, it can be seen that the brand attaches great importance to the market. Most companies cannot do this, and most company bosses have far less understanding of brands.

Secondly, it has a huge advantage in the number of stores and its own APP has a huge number of users, which means that it can provide better marketing exposure, better measure marketing effectiveness with data, and operate users for a longer period of time.

The following is what I think is Luckin’s strategy for integrating product quality and operation.

1. Data on user preferences: guiding new product development

In the traditional marketing era, new products are often released with advertisements after they are produced: large-scale advertising + product channel sales. This method is extremely risky. Once consumers do not like the new product, not only will the product be unsalable, but the advertising will also be wasted.

A few years ago, Costco had a new product launch strategy that is worth learning. After developing new products, its own brand Kirkland first puts them on the shelves of some of its own supermarkets for sale. If they sell well, they will mass-produce them, and if they don’t sell well, they will abandon them, which reduces the risk. For products that sell well, if they run another wave of advertising, it can be said that the risk of advertising is also greatly reduced. Of course, Costco’s concept was advanced at the time, and today it has become a regular new product development and launch strategy for many brands.

Luckin has a huge amount of user consumption data. According to Luckin Coffee's financial report, the cumulative number of registered users of Luckin Coffee's APP reached 408 million in 2022, of which 185 million were active users. These consumption data can guide the direction of Luckin's new product development. Luckin has a wide variety of coffee options at different times and seasons. Users' preferences can be judged through their consumption data within the cycle to guide new product development.

For example, after studying the preferences of young people, Luckin Coffee believed that milk coffee was a general direction and determined the "big latte strategy". Under this strategy, "thick milk", "raw coconut" and "velvet" lattes became popular products in 2021. Luckin Coffee's data also meets people's basic needs. As some people say, Chinese people don't like black coffee so much, but essentially like refreshing, sweet dairy drinks.

At Luckin, the best-selling products must be lattes of various flavors, which are simply dairy drinks. Of course, dairy drinks with a little Moutai liquor are also popular.

(Photo: Weibo)

2. Marketing to obtain traffic: Online traffic + store exposure to ensure sufficient exposure

As mentioned above, many brands have rushed to respond in an environment of internal competition. Brands have created content but have not put it out. Without it, they cannot acquire users, which is equivalent to wasting budget. For Luckin, there is basically no need to worry about this problem. Luckin's advantage is not how much budget it has for advertising, but the channel advantage that others do not have.

Let's take a look at the joint venture between Luckin Coffee and Moutai. This joint venture did not see much obvious placement in various channels. There are several differences:

One is the driving force of the product itself.

This co-branded coffee is a collaboration between two leading brands, and the gimmick of coffee + Moutai has attracted many people to buy it out of curiosity. As a result, social networks are full of exposure of this product, and many people are proud to show off their purchase of this product.

The driving force of the product itself cannot ignore the important role of packaging. The packaging of the product is an important medium for exposure. Many people walk in the city with packaging bags. When others see packaging like Moutai, they will be attracted and have the urge to try it. Luckin also used this in its cooperation with Coco Tree Coconut Juice.

(Photo: Luckin Coffee official Weibo)

The second is Luckin’s store advantage.

Luckin has more than 10,000 stores nationwide. Its products and packaging bags are all sold nationwide, and its exposure is far greater than that of many brands. In fact, all brands with store or dealer advantages have this feature. This is also the reason why KFC’s cooperation with Pikachu and Coca-Cola’s nickname bottle marketing are so popular. They all have free and massive exposure channels - stores. So it seems that Luckin’s joint marketing has not made much investment, but its free store resources have exceeded the traditional investment effects of many brands.

(Photo: KFC official microblog)

Of course, if the exposure is sufficient, more users will see and buy the product. While the product is selling quickly, the brand also acquires more new users.

3. Operate and take over traffic: LTV

As mentioned above, traditional marketing does not focus on subsequent behavior after acquiring traffic and users. For Luckin, since it has imported users into its own APP, it can use data to study how many users this marketing has brought in, and in subsequent operations, take corresponding operational actions based on the behavior of this group of customers to increase the LTV of new users.

For Luckin Coffee's combination of marketing and operations, it spends money on brand marketing to acquire users, and then intervenes in operations to carry out long-term operations of users, thus making back the money spent.

Yang Fei said in an interview: "The traditional marketing department is a department that spends money, while user operation is a department that makes money. The combination of the two will make brand marketing money spend more efficiently and know where to spend money more effectively."

Conclusion: The combination of marketing and operations is an inevitable trend

It is no coincidence that the joint venture between Luckin Coffee and Moutai has become popular. Behind it is Luckin Coffee's mature methodology of using data to drive products and marketing and combining marketing with operations. As an emerging brand, Luckin Coffee has also shown marketers a way to do brand marketing well. In my opinion, with the transformation of the real world by digitalization, the combination of marketing and operations is an inevitable trend in the future.
Author: Xunkong

Source: WeChat public account "Xunkong's Marketing Revelation (ID: xunkong2005)"