Naes: How commoners become nobles

In January 2005, "Naisi", which had disappeared from the TV screen for almost half a year, finally made a comeback. The toothpaste product advertisement of the Naaisi brand -- a Naaisi The cartoon image of Sri Lanka's toothpaste, plus the slogan of "the quality you can see, the VC and VE you can taste" - frequently appeared in the prime time of many TV stations including CCTV. This marks the official launch of the "Battle of Normandy" for Naais to enter the high-priced market, and Naais hopes to use this campaign to achieve a breakthrough for its brand from civilians to nobles.

Such a brand decision was made under the intense pressure of the international daily chemical powers led by Procter & Gamble. Naais started from super soap, and once attacked the washing powder market with "carved brand" and won the first place. In 2002, the sales of "Diaopai" washing powder exceeded one million tons, five times the sales of multinational companies in China.

In response to Nais' aggressive offensive, in the first half of 2003, Procter & Gamble launched a nationwide "vulture shooting" operation, from channels, prices to advertising, P&G did everything possible to squeeze Nais's superior Low-end detergent market.

After entering 2004, P&G continued to "shoot the vultures" unswervingly - increasing advertising and channel integration, provoking price wars from time to time, and in November 2004 became the new CCTV "standard king" ". In this way, when the "war" hit the second stage, Naess's "cannon" -- the TV commercial was suddenly silent. A high-profile, close fight that suddenly became a P&G show.

Behind the disappearance of advertising is the rapid expansion of business operating costs and the shortage of funds. Since 2000, NAES has emerged in the washing powder market, and it has become an unchangeable fact that NAES products, which are positioned in the low-price competition strategy, are maintained at low profit margins. And such a state of meager profits made Naais encounter a major test in 2004 when various costs were constantly rising.

In order to get rid of the problem of low profit margins, Naais decided to take the high-end route, and the launch of toothpaste products was the intention. Naaisi tries to use "Naaisi" to end the single appeal for "good quality and low price" and "efficient decontamination" established by relying on "carved brand", so as to transition the company's product line to high-end "shampoo" in the future. ", "Brightening Moisturizer" and "Shower Gel" get ready.

Zhuang Qichuan, president of Nais Group, seems confident in the high-end brand strategy. In his work report at the company's shareholders meeting in early 2005, he pointed out: "Fighting the Battle of Normandy, opening up the second battlefield, and developing high-priced products... will become a decisive point in fighting the oppression of the foreign powers, and it is also the real success of Nais. The only way to be a world-class enterprise in China."

Dear readers, in view of the above and what you have learned about the company's internal and external situation, what do you think of the high-end brand decision of NESS? What do you think Naais should do to achieve the breakthrough of the brand from commoners to nobles?

●Case study

Frank White, one of the greatest American artists, once put forward a design point of view: when you are designing a thing, you must consider how it is Exist or how to present yourself in the future environment. For example, a chair is placed in a room, a house is placed in its surroundings, a living environment is placed under the whole urban plan.

The same is true for designing a brand. In the future, the planning and development of the entire company's brand group cannot but be taken into account. Otherwise, when you continue to launch brands, whether it is successful or not, the contribution of the entire brand portfolio to the company's sales and profits will be unpredictable and impossible to optimize. Worse, a company will pay more to reintegrate its brand portfolio, or sell brands, or take some brands out of the market, and so on.

From a brand mix perspective, some brands compete in high-priced categories and some brands compete in low-priced categories. A company needs to have a basic understanding of the characteristics of different categories and how to compete within that category. Based on this basic understanding, we will launch the brand and formulate a long-term brand strategy. Now let's talk about the competitive principles of low-priced categories and the future success of Carved Brand.

Principles of competition for low-priced brands

The profitability of a brand comes from the combination of market share and the value of the category. A category can be marketed as a high-priced category like cosmetics or a low-priced category like laundry detergent. Low-priced categories usually have low profitability, even if the brand has a large market share. High-priced categories have high profitability even if the brand has a small market share.

Since domestic brands entered the laundry detergent market with low prices, and international brands such as Procter & Gamble's Tide and Unilever fought back with price wars, the entire market has been razed to low-priced categories. This category can no longer be transferred back to a high-priced category in the short term. Unless a company introduces a super-priced brand to redefine the entire category. For example, in the early days, sports shoes in the United States were a low-priced category. With the introduction of Nike and the hype of other corresponding brands, sports shoes have become a fashionable and high-priced category. However, in terms of the current competitive situation in the domestic washing powder market, this opportunity is not high.

In the low-priced category, brands with low market share cannot profit, so sooner or later they will be eliminated. The only way to make a profit is to occupy a large market share first, which is why P&G has exhausted all kinds of marketing methods and must seize the share regardless of huge sums of money. Therefore, if the carving brand does not want to withdraw from the market or sell the brand, the only way is to continue to expand its market share. How to do it?

The first and foremost is cost cutting, which is used to build or maintain brand equity and lower selling prices to keep competitors out of the water and maintain and expand the consumer base. Management should review the entire cost structure and remove expenses that do not increase efficiency. Inventory reduction is a priority, as too many product units will complicate production and shipping, thereby increasing operating costs. Improve production procedures, production unit equipment, rationalize overall production costs, and close some production units if necessary to reduce costs. Consolidate suppliers and eliminate product features that are unnecessary or of little added value. Simplified packaging costs...Low operating costs are the basis for competitive advantage in low-priced categories. The future of Diao Pai lies in whether Diao Pai can cut its operating costs to be lower than its competitors and operate more efficiently.

It is necessary to maintain and enhance the brand value, because it is a powerful tool to consolidate loyal consumers and expand the consumer base. Whether it is necessary to increase or maintain the original advertising volume is another issue, because this must examine the efficiency of the allocation of media resources. In the past, the carved brand has indeed successfully used social issues and contradictions to create brand favorability. But carving cards did not establish a brand value for themselves. What is the engraving? "Only choose the right ones, don't buy expensive ones", this is just an advertising slogan to challenge high-priced brands. It doesn't tell consumers what the engraving is? what is right? Therefore, the carved brand must first determine the brand value of the carved brand (low price is not the brand value!), and then continue to instill the established brand value in the minds of consumers.

In terms of appeal, it is good to use social issues, but this issue must be related to the brand washing powder or the washing powder category. An advertisement like "sensible article" grasps the correlation between the two. Carving does build a strong brand attitude. This attitude is worth continuing, and Cargo has the potential to build a brand that has become a cultural icon (in the US) like Nike or Coca-Cola. But planning for the future brand imprint and continued creativity is key.