Strategists Tell You: Branding Requires Standing in the Right Position and Telling a Good Story

We have always said: consumers are the subjects we learn from and the idols we worship; the closer a manager is to consumers, the more outstanding he or she is, and the closer a company is to the market, the more excellent it becomes. However, in reality, small and medium-sized enterprises have long held misconceptions and biases about branding. They do not understand which kind of value demand their products satisfy for consumers—whether it is product value or image value. This is directly reflected in the fact that everything is measured against "expensive": the most expensive beef jerky, the most expensive roasted pork buns, the most expensive organic lamb, the most expensive multigrain products. For a time, "expensive" seemed to be a royal road to rapid brand development, yet few realize that different values lead to different paths; everything must still start from understanding and recognizing the consumer. To build a brand, the first step is to stand in the right position and gain insight into consumers' value demands; the second is to tell a good story and carry out sustained communication.

What is product value? Take Mengniu as an example. During the process of providing products, it ensures that consumers perceive higher value. First, the product quality must feel good to consumers. To guarantee product quality, we pioneered an initiative in the dairy industry—a "milk tanker sauna workshop." The purpose is to thoroughly clean the milk tankers inside and out after they are pulled back to the ranch. If not cleaned properly, residual milk ferments inside the tanker, bacteria multiply quickly, and the newly loaded fresh milk will also see rapid bacterial growth. The milk produced will inevitably contain large amounts of bacteria, and naturally the taste and flavor will not be good. This single initiative required an investment of tens of millions. At the same time, only then do people perceive the rich aroma of the milk. In fact, we gave up a lot of profit. People asked whether we had added something to the milk—the answer is no, we actually reduced something. There is a process called "flash evaporation," which evaporates about 5% of the water content in the milk, causing us to earn 300 to 500 yuan less per ton of milk. If you do the math, that is no small amount. It is precisely because we earned so much less that consumers perceived higher customer value, which is why we are where we are today. This is what "product value" means.

Among Chinese enterprises, what is most poorly understood in consumers' inner activities is "image value." In fact, this is what we call brand—the added value of a brand is an emotion that is hard to put into words. If we categorize it under consumers' image value, customers who purchase products from companies with a high image are respected by others, thereby enhancing their own status.

Bosideng has a business of producing for foreign brands on an OEM basis. When we visited Bosideng, a Nike staff member traveling with us said that Nike's clothing is actually not as good as Bosideng's, because when placing orders, Nike uses relatively shoddy fabrics for the collar and cuffs, while we use very good ones. He said that consumers can sometimes be really silly. I said it is not that consumers are silly; it is that companies do not understand consumers and do not understand consumers' psychological activities well enough—they do not know why people want to buy Nike. This involves "image value." We sell for 300 to 400 yuan, while Nike sells for 1,000 yuan. In fact, they are the same—both produced right here. You see, overseas they are all labeled "MADE IN CHINA." Now, almost everything in the world and everything you buy abroad is basically "Made in China," yet why do people still buy it? It is not that consumers do not know Bosideng; they simply do not understand consumer psychology. This involves "image value." What does the brand mean in the consumer's mind? For Nike, the brand is about showing off. In consumers' minds, Nike equals 1,000 yuan, while Bosideng equals 300 yuan. So consumers clearly know it is produced by Bosideng, but when I put on a piece of clothing with that logo on, it is equivalent to telling my peers that I spent 1,000 yuan on a piece of clothing, while you only spent 300. Yet our companies rarely study consumers' psychological activities.

Different products occupy different proportions in consumers' minds; it varies from product to product.

Let me give an example. Take a company like Xiaofeiyang (Little Sheep)—product value may account for 90%, making product value the most important factor. For products like milk and bottled water, product value takes up a very large proportion. This is why Future Cola outsells Coca-Cola in some regions. Who would doubt Coca-Cola's brand? Yet it does not necessarily sell better—this is because for this category of product, product value accounts for a greater share. No one would say it is prestigious to take someone to Xiaofeiyang for a meal. Some companies would absolutely not entertain clients at Xiaofeiyang; they would definitely go to a high-end hotel because they feel that carries face. However, companies like Xiaofeiyang provide consumers with higher product value and have put significant effort into product research. For example, the lamb used must be from lambs under three months old—anything over three months is unacceptable—because the company knows what it relies on to win consumers. This is the product quality issue in brand building. As for the clothing mentioned earlier, what is clothing? The image value of clothing may account for 90%. Even though it is produced by the same factory and your quality is better than theirs, I am sorry, I still will not buy yours—I buy the product with higher image value. Different products are all different.

This leads to another viewpoint of pioneering brands: in consumers' minds, brands fall into two categories; one is "satisfying others." For example, no one would say product value is more important. A five-yuan digital watch can also tell time; spending seventy or eighty thousand yuan on a watch just to tell time would certainly make you a country bumpkin. In reality, the purpose is to show others that the watch on my wrist cost seventy or eighty thousand yuan, representing status and position. In other words, buying an LV bag is not for carrying things—if LV built its brand from the perspective of product value, it would fail miserably.

Then there is another type of brand called "self-satisfaction," such as beef and lamb, milk, mineral water. Not buying the expensive one is fine, because it is not meant to show off to others. No one says, after eating Mengdu lamb, "I ate Mengdu lamb today, China Famous Brand"; nor would anyone say, "I always eat Mengqing fragrant rice, the number one organic multigrain brand." This type of brand is about commitment—making people trust you, like you, and feel at ease.

Why do we need to understand brands? It is to understand consumers' inner activities. I know how to communicate and interact now, because brand creation is about winning consumers' inner认同. In the consumer's mind there is a brand ladder; once they认同 you, they will generate purchasing behavior. Therefore, for this "self-satisfaction" type of brand, as long as you communicate and interact well with consumers, you have an opportunity.

This "self-satisfaction" type of brand needs to be seen everywhere and available everywhere, and also needs to be supported by strong advertising and appealing brand stories. Take a simple example. When Mengniu first started, it had nothing—no China Famous Brand, no China Top Brand—just simple "Mengniu Pure Milk." When entering the Shenzhen market, it could not even get into supermarkets because it had no money. Yet it still had to develop the market. How did it do it? Because we understood what consumers were thinking—they would not show off to others by drinking an unknown milk called Mengniu Pure Milk. As long as they thought it suitable, they would buy it. So we went into Shenzhen's residential communities to sell, set up street stalls, and printed a flyer. On the back was written this sentence: "When you think of Shenzhen, you think of skyscrapers and high technology; when you think of Inner Mongolia, you think of blue sky, white clouds, grasslands, and the lingering fragrance of milk drifting from distant ages. Not tasting it after thousands of kilometers is your fault; tasting it and not drinking it is our fault. Good milk, of course, speaks for itself." Consumers heard it and thought it made sense—milk produced in Inner Mongolia must be good. You communicate with consumers; if they think it is good, they take it home, drink it, find it pretty good, and buy it again next time. This is the kind of brand this is. This is why Future Cola dares to compete with Coca-Cola, and Hualong noodles dares to compete with Master Kong. In fact, there are still many opportunities in China. They say when there is no opportunity left—wait until CCTV advertising is so expensive that only the top ten domestic brands can afford it and others cannot, that is when opportunities are almost gone. So as long as communication is done well, including communicating with consumers, with the same product it depends on how you communicate with them.

It is like two young men approaching a girl. If you do not speak, there is no behavioral expression—how can the girl get to know you? So you must constantly communicate with consumers. Give me a reason to choose you, give me a reason to love you; you need to have a reason. Just like that, we also need to study consumers' psychology, what they are thinking. We distributed flyers or placed them in supermarkets. On the back of one flyer was printed: "If a woman is not beautiful, men must bear half the responsibility." It studied their psychological activities—telling them to take the flyer home and settle accounts with their husbands. Later, our survey found that the people who took this flyer were mostly married women, because they felt what it said made sense. Let me read a few excerpts for everyone: "A woman who was originally excellent becoming increasingly shrewish—her man must be useless, forcing her to step forward; a woman who was originally pure becoming increasingly seductive—her man must be too spineless, so she has no choice but to look elsewhere; a woman who was originally proud becoming increasingly vicious—her man must be of low caliber. Conversely, a woman who was originally very ordinary becoming increasingly lovely in appearance, her eyes increasingly bright, her speech increasingly elegant, her gestures increasingly graceful—needless to say, she has a good man." So everyone felt this flyer was pretty good. This is the brand in consumers' eyes. Show-off brands are very difficult to build—you must constantly create brand stories.

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