Brand extension right and left

At the beginning of 2004, when PepsiCo decided to use its famous beverage brand to fully enter the sportswear industry in China, it did not cause too many irresponsible remarks in the market. Most people feel that under the leadership of the "Pepsi" brand with "young" and "avant-garde" as its core values, Coke and T-shirts, which seem to be irrelevant, can be combined logically.

Interestingly, just two years ago, when PepsiCo's Chinese counterpart, Hangzhou Wahaha Group, announced its foray into the children's clothing industry, the brand extension strategy of the largest food and beverage group in China encountered various controversies. The sound continues to this day. The biggest question people ask about this local brand is, what is the core value of "Wahaha"? It is also the connection between beverages and clothing. What kind of connection can "Wahaha" provide?

In fact, it is not the first time for "Wahaha" to be questioned on the road of brand extension. As early as 1995, the brand's development from a children's drink to an adult drink was cited as its biggest adventure. At that time, some people predicted that Wahaha would fall because of the vagueness of the brand personality. In fact, it is precisely because of this extension that Hangzhou Wahaha Group has obtained the opportunity to accelerate its development. The sales scale has grown from 1 billion in 1996 to over 10 billion in 2003, which is regarded as a legend in the industry.

Because of this, when the children's clothing strategy was constantly being preached as a negative case, Zong Qinghou, the founder, chairman and general manager of the group who created the "Wahaha" legend, just laughed: "I doubt we There are always many people with ideas, but we have always done a good job."

Zong Qinghou has always been quite confident in his "savvy" in brand marketing, and the "Wahaha" brand is very popular in the food and beverage industry and the children's industry. The two directions of extension are also the foresight he set at the beginning of his business. With a solid foundation in the beverage market, Zong began to have the energy to pursue another of his ideals. Getting involved in children's clothing is his first step in this direction. "The cross-industry brand extension will bring us new growth opportunities." Zong Qinghou expects that "Wahaha" will be able to support a new "children's paradise" after becoming a "drink kingdom".

Start: Accumulate Brand Equity

The implementation of brand extension strategy can only be successful after certain accumulation of related brand equity such as popularity, reputation and loyalty. Of course, Wahaha is no exception, but because it seized the right opportunity, this initial accumulation process did not take too long.

The "Wahaha" brand was born in 198_9. Zong Qinghou carefully studied the market at that time and found that although there were many brands of nutritional liquids, none of them were aimed at the target consumer group of children. So he seized this market segment and developed a children's nutritional solution for "appetizers for children", which he named "Wahaha". At the same time, the company officially changed its name to Hangzhou Wahaha Nutritional Food Factory.

Because of that famous children's song, the name "Wahaha" is very friendly and easy to spread. With the strong advertising campaign, the catchy slogan "Drinking Wahaha, eating is fragrant" quickly spread in the streets, and the brand awareness was quickly established. "What's more important," Zong Qinghou emphasized, "it does have an effect after a child's drinking once or twice, so it has a reliable and genuine reputation. Everyone knows that Wahaha is not a hollow brand that only relies on advertising. "

The positive effect brought by the brand is immediate in performance indicators: in 1990, the sales of Wahaha's nutritional solution exceeded 100 million yuan, and in 1991 it rapidly increased to 400 million yuan. The continuous expansion of the sales scale is also the continuous tempering and testing of the brand. Zong Qinghou believes that "to ensure our credibility, we must first not be sloppy in product quality." In Zong's view, the brand equity accumulated by "Wahaha" at this time is equivalent to the credibility of the enterprise. Its core value recognized by consumers is not the childlikeness and vitality revealed by its literal meaning, but "nutrition and health" which are inseparable from product quality. In this regard, in the market environment where inferior products were flooded and companies changed frequently, it was indeed easier to win consumers' loyalty to brands and companies, and it also allowed Wahaha to find an entry point beyond a single product pattern.

Fruit milk, the second product Wahaha developed in 1992, is still aimed at children. At that time, Wahaha had just acquired an insolvent state-owned enterprise under the arrangement of the Hangzhou Municipal Government. According to Zong Qinghou, the original intention of developing new fruit milk products was only because "more than 2,000 employees were added all at once, and the production and sales of nutrient solution alone could not digest so many people".

Although there were many similar products on the market at that time, with Wahaha's brand influence, sales channels and advantages of large-scale production, fruit milk was quickly accepted by consumers after it was launched, and it once occupied half of the market. . The power of the brand turned the original state-owned enterprise, which was almost bankrupt, into profit within three months.

Judging from the functions and selling points of the product, fruit milk is actually similar to the original nutritional solution for children. Even the lyrics in the advertisement song "nutritious and delicious" are clearly connected. Therefore, Zong Qinghou does not regard it as a brand extension in the true sense, "but rather the expansion of the product line." But there is no doubt that the two main products launched in succession have won great success in the market. The success has consolidated Wahaha's brand advantage and laid a good foundation for future brand extension.

Left: Beverage Kingdom

Although Zong Qinghou believes that the Wahaha brand based on children's beverage products should have two potential brand extension directions - that is, to extend to other products in the children's industry , and extended to other beverage products. However, when looking for new development opportunities for Wahaha in 1995, Zong Qinghou chose the latter from the perspective of product relevance and full utilization of existing resources: "Whether it is production line, R&D strength, or sales network, our The strengths are more suitable for breakthroughs in the beverage industry, which is more relevant."

At present, Wahaha Group has five categories of dozens of products, including bottled water, carbonated drinks, juice drinks, dairy products, and eight-treasure porridge. The sales volume of water, milk yogurt and eight-treasure porridge has been ranked first in the country for many years. 6.6 billion total assets, 10 billion sales scale - become China's largest food and beverage company. In the growth process of "Beverage Kingdom", the brand extension strategy contributed a lot.

Children's products-adult products have greater market potential for adult beverages than the children's market. Wahaha's first product extended to adult beverages, selected pure water with the widest audience. It can be said that naming the pure water "Wahaha" is the biggest turning point in expanding from the field of children's beverages to the field of adult beverages, and it is also the most controversial. "Many people thought that Wahaha was taking a risk." Zong recalled that at that time, many people in China used the brand positioning theory to refute this practice, and suggested that Wahaha should adopt a multi-brand strategy for adult beverages. "They said that if we extend like this, the brand personality of Wahaha will become unclear, and it will affect the original advantages of the brand."

Zong Qinghou thought otherwise.

He believes that the advantages of multiple brands should not be denied, but this requires a huge investment in the first place. It is basically impossible to cultivate a new brand into a national famous brand comparable to Wahaha without spending 200 million in marketing and advertising a year. In the reality of limited funding sources, if you try to attack in all directions and divert your energy, even if the new brand succeeds, it may drag down the follow-up investment and cultivation of Wahaha brand.

In 1995, the market for popular beverages such as purified water was still developing, the competition was not fierce, and there was no monopoly brand. Generally speaking, it was still in a period of brand reshuffling. Therefore, the cost of using the brand extension strategy is the smallest, but the chance of success is very large. "For us, concentrating resources to build a big brand, the brand's high popularity, reputation, consumers' sense of trust and security can drive a series of products to sell well." Although Zong Qinghou himself is a "perceptual" "A well-known enterprise manager for decision-making, but Wahaha's brand extension is based on rational appeal. He pointed out that brand extension must first ensure that the quality of the product does not deviate from the product itself, and "explain to consumers what our purified water is and where the benefits are."

Zong Qinghou believes that there are several elements in the process of "Wahaha" breaking through into an adult brand to ensure the success of this extension: First, the core values of the Wahaha brand include "credibility and safety", etc. Quality assurance is compatible with purified water and adult products such as eight-treasure porridge and tea beverages to be launched in the future; second, the "Wahaha" brand has a relatively strong affinity, and the unique childlikeness of the name itself and concepts such as "joy and health" are often It will also gain the preference of adults, making them easy to accept; third, most of the markets that Wahaha chose to enter were not strong leading brands at that time, so there was a lot of potential space.

On the basis of these factors, Wahaha has also made comprehensive adjustments to its advertising strategy in order to match the new product target consumer groups. Efforts have been made to dilute the original concept of children in the promotion, and promote young and pure emotional songs such as "I only see you in my eyes" and "Love you is equal to loving yourself", which has successfully created adults, especially young people's sense of identity with the brand .

Product Brand-Corporate Brand With the gradual development of the scale of the enterprise, Wahaha Group is constantly seeking to enter more market segments and find new growth points of performance. As a product brand, "Wahaha" has a relatively single core value, and it is impossible to completely dominate all multi-level and personalized market segments.

In 1998, Wahaha Group set its sales target ten times that of 1996. It was also in this year that the group aimed at a new profit growth point and launched the carbonated beverage "Very Cola" series, which was intended to challenge the two giants of "Coca-Cola" and "Pepsi-Cola". Obviously, "Wahaha" is no longer enough to show its momentum and difference to be "the Chinese people's own cola" and to challenge the century-old brands "Kekou" and "Pepsi".

"To make Coke, we chose to create another brand because Chinese companies making Coke is a very important thing in itself and needs a particularly impactful name." Zong Qinghou believes that after ten years of development, the company It also has the comprehensive strength to create a brand new brand. The launch of the "very" brand has made up for some of the cultural connotations of "Wahaha" as a product brand. Among them, the elements of atmospheric fashion and superiority broaden the definition of the original brand. "The English name Future gives a hopeful concept, which means that our cola is the future cola." Zong Qinghou is obviously quite satisfied with the new brand, "very" is currently extended to a series of carbonated drinks, such as Very lemon, very sweet orange, etc., and Liangle's product lines "Sprite", "Fanta", "Seven Up", "Mirinda" and other comprehensive competition.

In the promotion of Very Cola, Zong Qinghou adopted a strategy of mutual penetration between brand extension and multi-brand strategy. With the dual-brand or joint-brand approach of "Wahaha · Very Cola", we hope to enhance the influence of the two brands at the same time. "This is not simply to use Wahaha as a brand extension, but to use it as a corporate brand identity to provide a guarantee for Very Cola." Zong pointed out that the brand awareness and reputation established by "Wahaha" ten years of local development, not only can Enhance consumers' trust in the quality of Very Cola, and it is even more beneficial in attracting distributors and expanding distribution channels. Because of avoiding large and medium-sized cities where Liangle has an absolute advantage in promotion, and switching to the "rural route", by 2003, the annual production and sales volume of Very Cola has exceeded 600,000 tons, which is close to Pepsi, which sells 1 million tons in China. .

After this, Wahaha Group continued to adopt this co-branding approach to launch other series such as "Wahaha · Very Tea Drink", "Wahaha · Active Sports Drink" and so on. It has successfully transformed "Wahaha" from an original product brand to a corporate brand with a wider range of radiation. In this way, on the one hand, various beverages maintain an overall image in the market, and on the other hand, they lock in corresponding consumer groups.

"Enterprise brand and product brand are like the relationship between mother and child." Zong Qinghou believes that enterprise brand grasps the credibility of communication from a macro perspective, is abstract and general, and has inclusive power; while product brand is concrete and vivid, can Timely adjustments based on consumer preferences and market changes. This pattern can avoid the risks of "over-exploitation of brand resources" and "ambiguous brand positioning" that may be brought about by brand extension.