Business is the logic above the brand

When a brand is labeled with too many labels, it means that it is getting further and further away from the essence of the noun. This article analyzes the essence and logic of brands, hoping to help you understand brands better.

When we attach too many labels to a noun, the noun is drowned in labels. The more labels there are, the further away from the essence of the noun. Nouns are the boundaries of human cognition. "Namelessness is the beginning of all things; name is the mother of all things."

• The expensive ones are command verbs
• Cheap is an adjective
• Noun is the Creator
• The adverbial interjection is the crowd of spectators.

——Anything can be omitted from an advertisement, except verbs

When it comes to brands, there are many labels attached to them. Brands are traffic, operations, and IP; brands are trust, premium, and emotions; brands are value, assets, and links. These are all labels and forms of brands, but not the essence of brands.

What is the essence? The more labels you tear off, the closer you get to the essence.

On the contrary, the more labels you put on someone, the further you deviate from the essence. Wearing tinted glasses will always lead you away from the essence. What is the construction of a person's underlying framework? It is the process of constantly approaching the essence and the process of constantly tearing off noun labels.

In actual work, most brand work is either fragmented among the functional departments of the organization, such as marketing, channels, planning, new media, operations, and advertising; or it exists in the boss’s sudden inspiration or flash of inspiration.

For example: While drinking and chatting, the boss suddenly got inspired and took out a napkin and wrote a few words: We will do this next year and make 1 billion in 5 years.

1. Brand is essentially a business

Let’s start with the brands we are familiar with, such as: Coca-Cola, Starbucks, and Nike; and then some: Ramen Says, Santonban, and Zhong Xuegao.

Behind every brand lies a business; the essence of a brand is a business.

• Coca-Cola represents cola
• Starbucks represents coffee
• Nike represents sports shoes
• Ramen represents instant noodles
• Santonban represents instant coffee
• Zhong Xue Gao represents Chinese ice cream

From Coca-Cola to Zhong Xue Gao, behind all the brands you know, there is a business. The essence of a brand is a business; or in other words, the essence of a brand is the process of discovering and creating a business and occupying business opportunities with the brand. Therefore, for a brand No. 1, how to understand the business is a logic beyond the brand.

If the brand No. 1 only works on the brand level and can only do brand work, he will never understand the logic behind the brand. The solution to the problem often lies in finding the logical chain at the next level related to it.

In other words: the problem of dynamic sales does not occur at the sales level, but may be a product problem; similarly, the primacy of the brand is reflected in the business owner's understanding of the business. The brand is only a tool for the business, not the whole business - only by deeply understanding the business can we deeply understand the meaning and purpose of the brand's existence.

2. Brand: Discover a business

First: What is a category?

Category refers to the classification, storage and naming of relevant information by consumers. The value of business lies in classification, storage and naming. A name is a classification, and a classification represents a consumer demand. Classification, storage and naming directly affect consumers' purchasing choices.

Consumers express their needs in categories and choose products in brands. Whether it is Coke or Sprite, Starbucks or Didi, the whole value of a brand lies in whether your brand is used to express the needs when consumer needs arise. Categories are consumers' colloquial expressions, connecting with needs and expressing needs.

The value of branding lies in the fact that brand = category. The faster this equal sign is drawn, the more valuable it is.

For example: Afu is a company whose category is also its brand. For a long time, this company has been known in the industry as "Afu is essential oil". For example: In April 2019, Youyou, a pickled pepper chicken feet brand popular in Sichuan and Chongqing, was launched. Youyou has created an annual income of 1 billion in a limited region with only one category and one flavor. Afu and Youyou are not only brands, but also a business (essential oil, pickled pepper chicken feet).

For example, sales of premixed wine/fruit wine on Tmall and Taobao platforms increased by 154% in 2018 compared to 2017, and by 45% in 2019 compared to 2018. In 2020, the growth rate of fruit wine on Tmall 618 was as high as 120%, with fruit wine growing by more than 400% and plum wine growing by more than 1,000%. In the same fruit wine category, according to the big data released by JD.com, the compound annual growth rate of fruit wine sales on JD.com has exceeded 200% in the past five years.

If you were a wine company and had chosen the right niche market of fruit wine three years ago, then, if nothing unexpected happened, it would have been a steep second growth curve for the organization.

For this reason, category is not the cause but the result of choice.

The category a brand chooses to enter largely predicts the outcome of the business - therefore, category is the matrix: consumers use categories to match their demands, use categories to express their demands, and use brands to select products.

3. Product Strength: Occupancy Characteristics

For a long time, Amul, Chunzhen and Mosilian have been the "three giants" in the yogurt market, accounting for more than 60% of the market share. It is actually very difficult for other brands to have a place in the yogurt category through a differentiated concept.

In 2017, Junlebao Company pioneered the addition of cheese to yogurt, which not only enriched the nutritional value of yogurt, but also greatly improved the taste of yogurt. A new name was launched: Zhang Cheese La. The product was well received as soon as it was launched on the market. Within one year of its launch, it sold over 200 million packs, becoming synonymous with cheese yogurt.

How to understand products, a combination of tangible and intangible things that meet consumer needs. Not only core products, form products, and additional products, but also the understanding of categories, characteristics, and differentiation.

• Core products: physical properties, functions, benefits and value of products
• Form product: social attributes of the product packaging, form, appearance
• Additional products: product’s spiritual attributes, ideas, stories, and values

——The core lies in the discovery, understanding and occupation of category characteristics.

The key to grasping category differentiation and creating hot-selling products lies in product strength. Product strength is essentially the ultimate embodiment of category characteristics in product functions and benefits.

Wang Baobao is freeze-dried fruit, Xiaoxiandun is fresh, Wang Xiaolu is fried first and then stewed, Sandunban focuses on instant noodles, and Ramen says it has ingredients and meat. These new consumer brands all surpass certain characteristics of the original category products in their products. These characteristics may be the consumption pain points of the original category, the unmet needs of consumers, or the undiscovered new scenarios.

1. For this reason, we say that the essence of product power is to occupy new characteristics of the category by focusing on product functions and benefits.
2. The characteristics of new categories are the criticisms and pain points of consumers towards old categories, and are unmet needs.
3. There is only one reason why a product can become a hit: it captures the characteristics of a new category and captures new demands.

4. Product segmentation: differentiation

80% of business decisions come from how you discover new business opportunities brought about by category differentiation. This requires insight into the original category differentiation. A deep understanding of categories is the basis of category differentiation.

The origin of demand has never changed, only the way to meet demand has changed. The birth of new category opportunities or category characteristics opportunities is a new brand opportunity. The power of "differentiation" makes the world colorful. Everything in the world originates from "differentiation", and "differentiation" is the inevitable trend of species development, "The Origin of Species".

Category differentiation brings new market space, and differentiation is the driving force of business development. It is easier to create new brands in the process of category differentiation, because only new categories can bring new cognition, and new cognition brings new brand opportunities.

1. Zhong Xuegao

There is a basic practice in the dairy industry that first-rate milk is used to make baby formula, second-rate milk is used to make yogurt, third-rate milk is used to make ordinary milk powder, and fourth-rate milk may be used to make ice cream and popsicles. The criticism of traditional popsicles is that the taste is weakened due to the ingredients used.

Zhong Xue Gao discovered consumers' demand for high quality, found a high-price niche, proactively differentiated product categories, and revolutionized Yili, Mengniu, and Wall's.

2. Ramen Says

Master Kong and Uni-President have been struggling with the "unhealthy" image of instant noodles for many years, but they are helpless. Can instant food be both convenient and healthy? The demand has always been there, but it has never been met - Ramen Says has given its answer.

Starting with Japanese fast food, the company priced its products between 12 and 20 yuan. It carved out a niche in a high-end market segment and became famous. It met the needs of convenience and health. Workers found a convenient and healthy late-night restaurant on RamenShuo.

3. Yuanqi Forest

Happy Fat House Water, the A side of demand is greed, and the B side is fear. Magnifying beauty satisfies greed, while escaping fear brings action. Yuanqi Forest: Found the perfect combination between sugar-free and sparkling water - redefining sugar-free sparkling water.

In December 2016, the brand Rancha, which was marketed with "0 sugar" as its selling point, became the first product of Yuanqi Forest. Rancha's performance was tepid, and following the concept of "sugar-free", Yuanqi Forest launched its first cucumber-flavored soda water in March 2018. During Tmall 618 in 2019, Yuanqi Forest took the top spot in the water beverage category with sales of 2.26 million bottles; since then, Yuanqi Forest has been more widely recognized. Yuanqi Forest has launched a long product line around sugar-free and low-sugar products.

• Point: Breaking the circle with sugar-free sparkling water
• Line: Innovate in categories with sugar-free and low-sugar products to extend product lines
• Surface: Multi-category penetration, Yuanqi Forest products have covered multiple categories such as sparkling water, tea drinks, functional drinks, ready-to-drink milk tea, juice drinks, electrolyte drinks, energy drinks, coffee drinks and even yogurt
• Body: The growth rate of sugar-free beverages reached more than 30% in both 2017 and 2018. In 2018, the domestic sparkling water industry just reached a market value of 9 billion yuan.

4. San Dun Ban

Hand-brewed coffee is delicious, but complicated

Instant coffee is convenient, but tastes bad

The potential demand for convenient and delicious coffee has not been well met.

Santonban innovates the coffee category and launches a premium instant coffee that is both delicious and convenient

Premium instant coffee is comparable to the instant coffee that used to be brewed with hot water and stirred (Nestle, Maxwell House), while Santonban can be brewed with ice water and ice milk, and does not need to be stirred, and it dissolves in three seconds. The quality and taste are almost the same as freshly ground coffee. It has become a must-have for office workers and travelers. Not only is the product differentiated, but its packaging is also good-looking.

5. Wang Baobao

• Insight into the differentiation opportunities brought by category characteristics and seek incremental markets
• Carry out micro-innovation on products, actively differentiate category characteristics, and strive for leading brand position
• Taking advantage of the structural changes in new channels and new media, the cognitive dividends brought by traffic

For traditional oatmeal brands, 60% of their marketing and advertising expenses are used for sales promotion. A large amount of sales promotion expenses are invested at the terminal through display fees, entry fees, purchase-and-get-one-free fees, and rebate fees in the store, while their advertising expenses only account for 10% of it.

Different from traditional oatmeal brands, Wang Baobao focuses on online channels: Xiaohongshu, Bilibili, Douyin, and influencers. The art of war lies in deploying more troops than the enemy at both the offensive and defensive points - Napoleon.

• Invited celebrity Ouyang Nana to advertise on Xiaohongshu and became famous overnight
• Develop Douyin and continue to launch large-scale ads on Douyin
• Cooperate with Taobao Express, Diamond Exhibition, Super Recommendation and other in-site promotions

6. Xiaoxian Stew

Through the differentiation of old categories through technology, a third choice is provided for consumers between dry bird's nest and instant bird's nest, solving the pain points of dry bird's nest being inconvenient and instant bird's nest being not fresh. Through KOL/celebrity exposing product features, the advantage of "freshness" is seized. Through public relations activities, the "Good Production Practice for Fresh Stewed Bird's Nest" standard was launched.

7. Bear Electric

Urban youths are under great pressure at work and are lazy in life. They often cook for one person, and traditional rice cookers steam too much rice, which is a pity to throw away. Bear Electric Appliances has actively differentiated the categories of home appliances, explored scenarios, and launched an electric lunch box that can steam rice and vegetables, cook soup, and has many other functions. It is good-looking and cheap.

• Scene: Workers who bring their own lunch
• Pain point: Microwave heating can easily cause deviations in food moisture and taste.
• Demand: convenient, healthy, affordable

Author: Houshan Keju, Source: WeChat public account "Lao Gao Business and Brand"