Huiyuan Juice was delisted. How did the top brands decline?

In the previous articles, the author has discussed the topic of "how to create a top brand". Recently, I saw the news of Huiyuan Juice's delisting, and I couldn't help but be filled with emotion. In the commercial tropical rainforest, changes are happening all the time. There are always new species running towards the sun, while there are also strong old species that quietly weaken and fade out of the heart of the jungle.

Huiyuan Juice has been a "national brand" for 28 years. It once ranked first in the country in terms of market share for more than ten consecutive years. Now it is delisted. There are many reasons for this, such as the severe impact caused by the failure of its marriage with Coca-Cola, The chronic diseases of family businesses, limitations of founder culture and structure, weak product innovation, outdated marketing methods, etc.

From the perspective of brand strategy, there are two important reasons for Huiyuan Juice's delisting: the lack of timely product upgrades and crazy diversified expansion, which resulted in the inability to keep up with the needs of young people and the dilution of the brand. Cognition has weakened Huiyuan's core advantage in the "high-concentration pure juice" category.

In fact, many of the top brands at home and abroad have been ruined due to brand strategic direction issues, causing the brand to stall or even cease to exist in the market, which makes people sigh. Below, Mr. Xin summarizes four common failures of leading brands:

01.

Withering in the Leeward: Failure to switch from declining categories to new tracks in time

American marketing guru Reese proposed in the book "The Origin of Brands" that a category is like a big tree, and a brand is the fruit growing on its branches and leaves. As the category grows and withers, so will the market size representing the brand. With growth and decline and withering.

Therefore, when the category that the brand parasitizes begins to decline, the brand needs to transform and upgrade in time and switch to new subcategories in order to prevent being dragged down by dying categories. This is in those industries with short cycles and This is especially true in the fast-changing technology industry.

At that time, Nokia mobile phones were the best in the era of feature phones. They were the absolute king in terms of market and reputation. However, Nokia failed to seize the new opportunities of smartphones, even though it was launched very early. Smartphones, but their design logic and experience did not meet the needs of smartphones. Therefore, they were overtaken by Apple, Samsung and other brands, and finally became an "old man's phone".

Kodak film was once a representative brand in the film market. However, the emergence of digital cameras and smartphones directly sent consumer film to the grave of history. It is still in demand only in professional markets such as medical and industrial. Kodak also suffered heavy losses. In 2012, Kodak, a 131-year-old photographic equipment company, officially submitted an application for bankruptcy protection to the court.

On the contrary, facing the decline of the film industry, Fujifilm promptly switched tracks and entered the skin care products, medical and health industries by leveraging its advantages in antioxidant technology, collagen technology and nano-dispersion technology in the film field. and high-performance materials industry, successfully transformed, radiated new vitality, and achieved revenue of 100 billion.

The same is true in the field of consumer goods. Some brands have not grasped the opportunities of upgrading consumer demand and product upgrading, and have been cannibalized and replaced by new categories and products, and their development has encountered bottlenecks.

Huiyuan Juice has the advantage of high-concentration juice. The slogan "Drink Huiyuan Juice and Walk the Road to Health" is deeply rooted in the hearts of the people. It can be seen that Huiyuan Juice has a "healthy" brand gene. However, with the upgrading of consumption, people now have higher requirements for the health of juice, and they prefer natural freshly squeezed juice.

Huiyuan Juice should have upgraded in time, and was the first to lay out the "NFC juice" track (that is, non-concentrated reduced juice, the fresh raw fruit is washed and squeezed out of the juice, and then filled directly after sterilization, completely retaining the fruit Original fresh flavor), occupying the commanding heights of "healthy juice" in the new consumption stage.

In the field of cup-filled milk tea, the fragrance spreads all over China, and the advertisement boasts that "more than 300 million cups are sold a year, and the cups can circle the earth together." In the first three quarters of 2020 , Xiangpiaopiao's revenue fell by 20.47%, and it has increased revenue without increasing profits for three consecutive years.

This is mainly because the domestic demand for tea drinks has been upgraded towards health and new tastes. Cup milk tea no longer meets this new demand. In recent years, Heytea, Chayanyuese, Leletea, etc. The rapid rise of ready-to-drink milk tea has captured the needs of young people and aggressively encroached on the market of Xiangpiaopiao and Youlemei.

However, Xiangpiaopiao is also currently seeking transformation and has launched a number of new tea brands. Let us wait and see whether it will succeed or fail in the future.

02.

Obsessed: blind diversification, diluting the core competitiveness of the brand

To create a strong brand, clear and sharp brand positioning is the first priority Yes, this is the engine of brand value. When a brand has not yet established a strong moat, premature brand extension and diversified development that is irrelevant or contrary to its positioning may blur this positioning, causing the brand to become out of focus and lack potential, and it may be replaced by second parties. The brand took advantage of the situation and surpassed it.

Huiyuan’s decline also fell into this trap. In order to become bigger and stronger, after Coca-Cola's acquisition of Huiyuan failed, Huiyuan once claimed to invest 5 billion to enter carbonated drinks to develop fruit juices, and later announced the acquisition of Rising Sun to enter tea drinks. The pace of diversification could not stop at all. Candied haws juice, cocktails, I have tried various methods such as quick-frozen dumplings and purified water, but to no avail.

(Picture: Huiyuan Zhenxuan Cocktail)

Similarly, VV has been involved in the liquor industry, real estate industry, tea industry, coal industry, and pharmaceutical industry for more than 10 years since its listing. and finance and other fields, the results were not good, and some of its subsidiaries and fixed assets had to be transferred or sold.

This does not mean that brands cannot be diversified, but that brand extension and diversification must be structured. In fact, there are many diversified and successful brands in reality, such as Disney, Virgin, Tencent, Master Kong, Wahaha, Yili, Three Squirrels, etc. At the beginning, Huiyuan Juice wanted to become bigger and stronger, and it was right to diversify and develop at the right time, but it did not grasp the rhythm and method well.

Successful brand extension and diversified development must have scientific extension logic and be particular about the purpose, timing, project selection, brand architecture, etc. of diversification. Specifically, the following points are as follows:

(1) Clarify the purpose of diversification

Brand diversification must have a specific purpose to be meaningful: either to strengthen brand advantages and establish brand barriers; or to integrate upstream and downstream resources , reduce transaction costs and increase market voice; either improve the supply chain and effectively control quality; or seize industry dividends and quickly enter the track; or attract core technologies to make up for the lack of own capabilities; or build an ecosystem to form synergy effects... …

Take the flower brand "Take Time" as an example. It initially used a cost-effective model of dozens of yuan per month to enjoy a bouquet of flowers delivered to your home. In 5 years, it has grown into a well-known Internet brand in China. Flower brand. This model has a good effect in attracting traffic and acquiring customers, but it also has problems such as high cost and unstable quality.

(Picture: Gao Yuanyuan endorses "Take a Time")

Therefore, "Take a Time" began to extend to the upstream supply chain. It has 10,000 acres of flower planting bases in Yunnan and has nearly 10,000 acres of flower planting bases. The flower e-commerce company that has signed a contract with the base also has a smart flower processing factory, which can effectively reduce costs and control the quality of flowers, thereby better solving the pain points of the model.

On the other hand, Huiyuan's diversified extension is more speculative. It invests in whatever opportunities are found, without considering the compatibility with the core positioning of the juice brand. Each new business is If we don’t do it thoroughly, we won’t be able to achieve results and we will have to retreat hastily.

(2) There must be extension logic to form a synergistic effect

Multiple extension logic must have a "backbone", which may be the core business or brand positioning, so that Only then can you effectively integrate various businesses to form a 1+1 2 synergy, and at the same time allow the brand mind to hold diverse businesses without confusion and loss of focus.

Disney’s business is complex, including theme parks, film and television works, peripheral products and even brand licensing of various consumer goods. However, so many businesses are inseparable from the core value of “making people happier” .

The business of Tencent Empire is also extremely diversified. It seems that it has a hand in every Internet track. However, looking at the priority of its investments, it is generally inseparable from a core logic, which is to focus on The scenario of "big social networking and pan-entertainment" is used to lay out the ecology.

Three Squirrels extends from nuts to dried fruits, tea, braised food, and even movies, animations, theme parks, etc. Its axis is "Squirrel IP", and the virtual reality built on this basis is The "Squirrel Kingdom" has become the integrator of brand extension, greatly strengthening the scalability of the brand.

Therefore, when diversifying, you must find an "axis", extend around the relevant areas of the "axis", and coordinate with existing businesses as much as possible, so that risks will Much lower. On the contrary, it is easy to become acclimated if you enter an unfamiliar field, a new business, a new customer group, and a new circle for no reason.

The original extension of Huiyuan Juice can focus on the axis of "juice" and use the strong brand potential of "high-concentration juice" to extend in upstream and downstream directions, juice subcategories, and different juice grades. , because the pool of the "juice" track itself is large enough, with enough space to explore and release, instead of blindly circling wildly in unrelated drinks and food.

Of course, if you really want to seize the new opportunities in the bonus industry and enter a completely new track with great differences, it is not impossible, but you may not necessarily use the existing brand, but you can Consider adopting a new brand so that it does not dilute or be limited by the original brand positioning.

(3) Focus on the main business first and seize the opportunity for diversification

Enterprise resources are limited, especially in the early stages of development from 0 to 1, concentrate superior forces and "focus" on superior businesses. Only in this way can we develop strategic acumen and most effectively drive business growth. At this time, the brand's focus is to reach the top level of the industry in this field and forge its core advantages, rather than rushing to diversify its development.

Even if the brand is promoted to the top brand in the industry, there is no need to rush to diversify, because the foundation of the company may not be strong at this time, and it is necessary to further build the brand in terms of mentality, technology, supply chain, channels, etc. A moat in all aspects creates an absolutely irreplaceable advantage.

When a brand has established a solid moat and a good foundation, it can prioritize those areas with potential and good strategic fit for diversification, and expand outward in a rhythmic and orderly manner; or in When existing business growth space is limited and consumer demand shrinks, the company develops the "second curve" through new business.

(Figure: Second Curve Model)

03.

Brand aging: abandoned by young consumer groups

In the market, " The phenomenon of "one emperor and one courtier, one generation of users and one generation of products" is not uncommon.

For consumers, some brands originally represent coolness and fashion, attracting a generation of consumers. However, when young people are no longer young, the needs and aesthetics of the new generation of young people are very different. If the brand is still the same and old style, then the new generation of young people will feel that this is no longer the brand they like. , but the brand used by parents.

Especially those fashion products for young people. When the once cool products are no longer cool, and the brands that endorse young people represent old-fashioned, it means that the original personality of the brand has been ignored and there is no trend. With a certain temperament, it is easy to be abandoned by the new generation of young people. The brand cannot keep up with the change of generations and gradually loses its stamina. This is the danger of "brand aging".

Olay, once a household name, targeted female consumers in their thirties and forties at that time. However, with the upgrade of China's cosmetics consumption, Olay's products and value have not kept pace with the increasing needs of this group of people, and young girls are more willing to buy products that are consistent with their age and are unwilling to go with "middle-aged women" Sharing the same skin care products, although Olay has excellent quality and affordable prices, by 2010, consumers rarely mentioned Olay.

Metersbonwe, which is very familiar to the post-8090 generation, once achieved a brilliant performance of 1.206 billion yuan in net profit in 2011 with the support of celebrities such as Jay Chou and Angela Zhang, which are highly popular spokespersons. However, due to the failure to capture the new generation of young consumer groups, the post-8090 generation is unwilling to buy it anymore, entering a years-long decline. In 2015, Meibang's net profit lost 396.57%, up to 430 million yuan.

In today's Chinese market, the phenomenon of brand aging is not an isolated case, but a common phenomenon. Many leading brands such as Wahaha, Lenovo, L'Oreal, Changhong, Belle, Baleno, and Semir are all Experiencing the troubles of brand aging, we have to be alert.

However, what is gratifying is that there are also many domestic brands, such as Li Ning, Pechoin, Weilong, and Want Want, through fashion celebrity endorsements, product design innovation, new channels, new gameplay, cross-border co-branding, Ideas such as reshaping values ??have successfully achieved rejuvenation and given off new vitality. (As for how to rejuvenate the brand, the author will write an article specifically to discuss it in the future)

04.

No zuo no die: word-of-mouth overturn, it’s your own fault

The era of social communication , the effect of word-of-mouth can be infinitely amplified through viral spread. Good reviews can make a brand rise rapidly, while bad events can make a well-known brand lose its reputation overnight, and this effect is difficult for the brand to control.

However, there are always some brands that ignore social order and good customs, disregard market rules, ignore the appeal of public opinion when a crisis occurs, pretend to be superficial, and have no sincerity, leading to growing public resentment, and finally converge. The negative reviews are enough to put a brand in trouble. Some time ago, a social e-commerce platform handled the sudden death of an employee working overtime, which is a negative example.

In the past few years, the leading Internet brands must be called "BAT", but now the word is rarely used, because Baidu has seriously fallen behind in BAT, being beaten by JD.com, Meituan, and Pinduoduo. Waiting for companies to catch up.

Baidu’s current silence is, on the one hand, due to the fact that its search business has been diverted under the mobile Internet ecosystem and the company is in the investment stage of artificial intelligence transformation. On the other hand, it has also been severely hit by a series of negative events in the past. Baidu's corporate culture of being overly utilitarian, tool-oriented, and lacking in humanistic care has led to many disputes and has seriously affected Baidu's product experience. It is expected to fall behind.

Samsung mobile phones account for 30% of the market share in China, but now its market share in China is less than 1%. The reason for this change can be traced back to the explosion of Samsung note7 mobile phone in South Korea in 2016. After the Note 7 exploded, Samsung still launched the Note 7 in China, but recalled the 2.5 million Note 7 units sold in global markets outside China. Such different treatment of Chinese and European and American consumers has caused many Chinese people to lose any favorable impression of Samsung, and Samsung's reputation has plummeted.

There are many brands that have encountered crises due to negative events. For example, Sanlu milk powder was shut down directly due to the melamine incident; Qvod was shut down because it stepped on the red line; Luckin Coffee went through a long period of financial fraud. After a period of labor pain, I slowly regained my strength.

Therefore, in the social era, companies must view brand reputation from the perspective of "brand equity", have a sense of crisis management, protect the reputation of the brand, and do not lose long-term brand value because of short-term benefits. , that would really be more of a loss than a gain.

Summary

There are many reasons for the decline of leading brands, and the above common reasons cannot be summarized. For example, innocent victims like He Qizheng were affected by the fight between the two gods Wanglaoji and Jiaduobao; supply chains like ZTE and Honor were destroyed due to international disputes; companies like Robust, Arctic Ocean, Little Nurse, etc. were After being acquired by foreign capital, it was hidden away...

As the saying goes, "A lesson learned from the mistakes made by others", understanding some common rules of the failure of leading brands can provide us with a mirror to guide us in building a brand. Take fewer detours on the evergreen road.