New consumption has lowered its profile, and popular brands are moving towards high-end?

With the changes in the current consumer environment, brands have expanded their ecological niches. This article mainly talks about the downward expansion of the Zhong Xue Gao brand and the upward expansion of the Shaxian snacks brand, explaining the current situation where the brand image is solidified and difficult to change. Finally, it explains how brands should establish a new cycle of brand concepts and consider the real consumer value. It is recommended for people who think about brand value to read, and I hope it will be helpful to everyone.

Assassins and civilians began to "redeem" each other. Trout said in "Positioning" that companies must differentiate themselves from their competitors in the minds of users and become the first in a certain field.

But an interesting phenomenon has emerged at the moment: brands are no longer satisfied with the "ecological niche" restricted by positioning theory, and have begun to break their own industry "segments" and try to make products that are completely opposite to their own positioning.

For example, recently, the "Ice Cream Assassin" Zhong Xue Gao has launched a high-profile low-priced new product in an attempt to embrace a broader sinking market; in contrast, Shaxian snacks, which have always won by offering affordable products, has attracted attention because of the opening of a new flagship store with an average price of 300 yuan per person.

Zhong Xue Gao and Shaxian snacks, which have been on the hot search list one after another, also represent the two different forces of "downward" and "upward" of the brand. The contrast forms a kind of clever coincidence with the current changing consumption trends.

Can the "assassins" and "civilians" achieve redemption by attacking each other's territory?

1. Must we do it or winner takes all? Anxiety and helplessness in the dimensionality reduction and sinking market

Summer has not officially arrived yet, but Zhong Xue Gao’s enthusiasm for launching new products at reduced prices can no longer be contained.

Taking advantage of the popularity of GPT and Wenxin Yiyan, the price of "Sa'Saa", named after Zhong Xuegao's artificial intelligence, was recently locked at 3.5 yuan.

What does this mean? One Zhong Xue Gao can buy almost 4-6 Sa'Saa.

Why lower the price? Regarding the significance of launching the affordable line, Zhong Xue Gao said, "I hope to enrich my product line and provide consumers with more choices." But anyone with a discerning eye can see that Zhong Xue Gao, who has lowered its profile, obviously wants more.

If you think about it carefully, there is indeed a "winner takes all" logic when high-end brands expand their price range downward, but it seems that some decisions "have to be made."

Last summer, "ice cream assassin" almost became the most popular online term. Ice cream assassins that cost more than ten yuan often hurt the wallet like a thorn in the side. As a representative of this, Zhong Xue Gao naturally became the focus of attention. Although black and red are also red, in the long run, the impact of negative emotions on brand reputation is not small. Zhong Xue Gao also urgently needs to accumulate more public favor. In this context, its "affordable strategy" seems to be more urgent.

You should know that Zhong Xue Gao has already incubated a sub-brand "Li Daju" priced at 5-10 yuan in 2019, but its brand volume has been lukewarm. It is worth noting that unlike Li Daju, Sa'saa still retains the words "Zhong Xue Gao" on the packaging, intending to emphasize this "kinship" relationship.

From this perspective, the lower-priced Sa'Saa can be regarded as a further exploration of Zhong Xue Gao's price bottom line. After all, Zhong Xue Gao's current problem is how to get rid of the label of "too expensive" and create another not-so-expensive hit to reverse its brand image.

The anxiety may be different, but the attitude of downward compatibility is the same. Zhong Xue Gao is not the only new consumer brand that is targeting the sinking market and reducing its price.

For example, Heytea, which used to have an average price of 28 yuan in the early days, launched a new sub-brand "Heytea" for the sinking market in March 2020. The price is also mainly between 6 and 16 yuan, directly competing with Mixue Bingcheng and Chabaidao.

Another example is Haidilao. As the number one hotpot restaurant known for its high-standard service, it has also been continuously incubating sub-brands from a sinking perspective: Baifu Private Noodles, Xinqin Noodle House, Shibaquan, Uding Maocai, Laopai Youmianer... in order to build multiple growth curves.

How cheap is it? Take Lao Pai You Mian Er as an example. The special cold noodles are priced at only 2.99 yuan per bowl, which can be called the "Mi Xue Bing Cheng" of the noodle world.

However, when the new consumer brands, who were used to looking up at the moon, bent down to "pick up coins", they did not get the "six pence" they wanted.

Acclimatization has become the norm for transformation in the short term. In November 2022, Xixiaocha, which had been trying for 2 and a half years, closed all its stores; Haidilao also failed completely in more than half of its 8 catering sub-brands.

Is the dream of brands to dominate the high-end, mid-range and low-end markets really just a dream?

The incompatibility of high-end and low-end market service capabilities is probably the key reason why Heytea and Haidilao have been frustrated in their efforts to expand into lower-end markets. Heytea’s “skills” in making exquisite tea drinks at RMB 20 a cup cannot be transferred to the affordable milk tea at RMB 6 a cup; Haidilao, which entered the fast food market by leveraging its supply chain advantages, cannot achieve a better “quality-price ratio” after reducing its dimensionality, and therefore has difficulty in gaining a share of the market.

There are barriers to competition in different price dimensions. High-end mindsets cannot be directly transferred. More importantly, the reduction in costs and service inputs after price reductions tests the brand's deep understanding of the quality-price ratio. In practice, there are also challenges in presenting quality dimensions.

The pressure also comes to Zhong Xuegao. After all, the most direct reason why Sa'Saa is cheap is the raw materials.

In comparison, the top two ingredients of Zhong Xue Gao are milk and whipping cream, while the main ingredients of Sa'Saa are water and sugar. In other words, Sa'Saa reduces costs and thus prices by reducing the milk content.

This raises another paradox: Is a popsicle priced at 3.5 yuan a bargain? Will consumers pay for such a low-price product? We can only wait for the market to test its actual performance.

2. How difficult is it to improve brand image? The Achilles heel of high-endization

In fact, things are changing.

When new consumer brands are troubled by growth anxiety or brand tone, they want to lower their heads and pick up coins. On the other hand, mass brands that have been sinking and flat, in addition to anxiety, also want to start "exploring" higher values ​​and want to see a rounder moon in the sky.

Shaxian snacks, which are famous for being cheap and delicious, have also started to "make a living" and launched a "Beijing flagship store."

What is more eye-catching than the 1,000 square meters of business area is the price of 300 yuan per person. From 15 yuan per person, the minimum consumption in the private room has jumped to 300 yuan. The sudden "high-end" of the Shaxian snack flagship store caught people off guard.

First, the environment is upgraded, with an immersive scene based on Chinese architectural style. Second, the area is diversified, with a new retail area for Chinese snacks, a smart kitchen area, a display and operation area, and a dining area.

Overall, it is a test of high-end development, aiming to create a comprehensive flagship store integrating catering, cultural and creative industries, social services and new retail.

Indeed, Shaxian snacks enhance the brand added value through intelligent and IP-based performance, so as to play a greater role in high-end value.

Not only Shaxian snacks, in 2021, Zhang Liang Malatang also opened a flagship store with an area of ​​more than 1,500 square meters in Harbin, becoming the "world's largest Malatang" at that time. It also introduced a rich variety of seafood ingredients, and the first order after the opening was a bowl of lobster Malatang for 690.5 yuan.

However, although such flagship contrast can directly elevate the brand image, due to the brand foundation, it is difficult to replicate high-end flagship stores in large quantities like chain stores.

Perhaps this is the sense of "fate" that affordable brands find difficult to break free from. As Mixue Ice City CEO Zhang Hongfu said, Mixue Ice City's LOW is "digging for food in the dirt." Their brand marketing is often more unique, relying on a deeper understanding of the most basic needs. If you want to transform into a high-end upgraded business, you naturally have to do some homework.

But even though it has a clear self-awareness, Mixue Ice City has not given up its eager desire for high-end. Mixue Ice City has tried to go high-end for a long time, but it is hard to say that it has been successful.

In 2018, Mixue Bingcheng launched a high-end brand "M+" with a unit price of 20 yuan per cup. However, "M+" failed to adapt to the high-end ecosystem and eventually closed down.

The difficult journey of civilian brands to become high-end brands also reminds people of the Achilles' heel.

In ancient Greek mythology, Achilles was shot in the ankle by Paris and died. Later generations often use "Achilles' heel" to mean that even the most powerful heroes have fatal weaknesses or weaknesses.

Just like Mixue Bingcheng, even if it can achieve the highest penetration rate in the milk tea market, it is like "punching on cotton" in the high-end field.

Indeed, whether it is Shaxian snacks or Mixue Ice City, high-end means higher customer spending, higher gross profit margin, and stronger ability to make money. Almost no brand will refuse such a growth temptation.

What is the difficulty in building a brand from low to high?

We can try to answer this question with a metaphor. In many cases, a brand is like a stream of water. It is relatively easy to flow from a high place to a low place. But if you want to flow from a low place to a high place, you need a higher water pressure to support it.

From a consumer's perspective, when a brand you are familiar with sells its products at a higher price, you will naturally want to find out the reason behind it.

How brands can help consumers complete the evolution and transition from "cost-effective" thinking to "quality-price ratio" thinking is a long-term task. After all, what needs to be done is not only to establish a high-end mindset, but also to reverse the original brand impression.

The original proposition remains unchanged. For affordable brands, how to sell products at a higher value means not only improving the brand tone, but also cultivating the ability to provide higher-end products. The two are interdependent.

3. What kind of brand concept does the new cycle require? A new thinking on value and price

If we expand our perspective, it is not difficult to find that the expansion of brands' ecological niches is closely related to the changes in the current consumer environment.

Japanese scholar Hidetoshi Miura wrote in "The Fourth Consumer Age": The second consumer age pursued "the bigger the better", the third consumer age pursued "diversity of personality", and the fourth consumer age pursued "returning to nature".

China’s consumption situation is special. my country is currently in the transition from the third consumption era to the fourth consumption era, and multiple consumption eras coexist. From the perspective of changes in consumption structure, it is not difficult to understand the psychology of brands wanting to step out of their own ecosystem and continue to expand in the "reverse" direction of their own positioning.

By extending their price range, they can better hedge against growth risks and cope with the rapidly approaching differentiation of consumption structure. Indeed, consumer demand is the vane of brand development.

As early as 1935, Nobel Prize winner in Economics Hayek proposed the theory of "consumer sovereignty", arguing that what to produce and how much to produce should be determined by the wishes and preferences of consumers.

But in the final analysis, whether it is a popular brand or a high-end brand, consumers have only one consideration to meet their needs - whether the price of the product matches its value.

With this as a baseline, it is not difficult to understand that the core propositions faced by brands, whether they are moving upward or downward, are always the same - perhaps the essence of competition, whether it is dimensionality reduction or dimensionality increase, is the in-depth search for "value".

From a cyclical perspective, the "turn from defense to offense" of price band expansion is a race to grab land based on consumers' minds, and is also a further manifestation of accelerated industry competition and intensified internal circulation.

Whoever can grasp the core and complete the "value expression" more completely will survive this jungle war.

I hope more and more brands can find their own "moon" and "sixpence".

Author:yummy

Source: WeChat public account "Shock Copywriter (ID: SHOCKCW)"