Chen Haichao

On November 2,2012,Pechoin won the second bidder right in 2013The Voice of Chinawith 70 million yuan.Together withJIA DUO BAO,the uppermost sponsor of 2013The Voice of China,the two staged an amazing performance in which local brands defeating international brands.In the following “Double 11” Shopping Festival,Pechoin's sales on Tmall reached over 15 million yuan only till 3 p.m.on that day,showcasing that this Chinese time-honored cosmetics brand has achieved rebirth to a large extend.

Same as Pechoin,local famous brands like XieFuchun,Golden Ballet,Hongdeng and Shuangmei,are still struggling to find a breakthrough on their development.Deconstructing the secret of Pechoin's “new concept in old framework” will have an enlightening significance for the whole domain among the Chinese cosmetics industry.

Taking a look on the development process of Pechoin in the past years,it is not difficult to find that it has been a period when Pechoin has been struggling for its development with great efforts.The year of 2008 is a watershed for Pechoin to revival.In that year,Pechoin completely reformed itself including its brands,products,channels,and image publicity.

Brand positioning: products with Chinese characteristics winning consumers' trust

Pechoin,a Chinese time-honored brand of cosmetics,was born in 1931 and experienced more than 80 years of hardships on its way to be one of the successful cosmetics enterprises in China.It once shone brilliantly in the 20thcentury,however,it was submerged at the bottom of the trend of the increasingly fierce competition led to by the economic development and social progress.

Why do Chinese time-honored brands decline frequently just by taking the example of Pechoin? There's an underlying reason,of course,but there is one thing that cannot be denied,that is,the core value of the old brand can no longer meet the deeper needs of consumers,especially young consumers.Only by injecting innovation force into the brand and meeting the value demands of consumers can the brand be revitalized.Pechoin has also tried to revive the marketing idea of “classic Chinese goods”,but it is helpless to find that the Pechoin wearing the label of “classic Chinese goods” can not only make people recognize its historic brand qualifications but also be labeled “aging” intentionally or unintentionally and make people lack enthusiasm for purchase.It is in the long-term trial and error that Pechoin has realized that the old thought can barely manage the basic profit,if it wants to be “well-off”,it has to find another way.

Undeniably,for a long time,local brands in the skincare industry have been beaten to pieces by multinational brands represented by L'Oreal,Olay,Shiseido,etc.They can only survive in the market segments department and even in the circulation field.This situation has changed since from the birh of another local brand,Herborist,whose price is fluctuated from the middle to high price,has successfully broken the monopoly of multinational brands on the middle and high-end market by selling the concept of “Herbal”,the quintessence of Chinese characteristics.Following the routine of Herborist,INOHERB changed its price line to the middle and low end,avoiding direct competition with Herborist.Although there was not much new idea in INOHERB's sales concept,it still emerged from the fierce market competition and became another sucess in China's skin care industry.

In the field of washing and chemical products,Bawang Shampoo has won the market greatly with the same concept of “Herbal.For the domain of shampoo,which is generally acknowledged to be monopolized by multinational brands with no other local brands being successful in the past ten years except Bawang.Bawang successfully broke through the blockade of multinational brands with the quintessence of Chinese herbal medicine.As for its plight happed before,it is more related to management and has nothing to do with the brand positioning of Chinese style.

In terms of the brand level,the success of these local brands such as Herborist and INOHERB,is to integrate “herbal” into the brand value and change its brand attributes and genes.Chinese traditional culture has a history of thousands of years of exploring and applying Chinese herbal medicine for beauty treatment,shampoo and hair care,which is beyond the reach of multinational brands and is also the shortcoming of multinational brands.Therefore,the confrontation between plants and chemical technology,the confrontation between Chinese herbal medicine culture and foreign culture,were utilized to avoid the disadvantages of local brands and play its long board effect.

The more national,the more global! The success of forerunners such as Herborist has pointed out the direction for the brand of the Pechoin.Although there are still many non-herbal traditional products in the product line due to historical reasons,whether it is aware or not,the marks and scratches left by the newborn Pechoin in consumers' minds are its herbal image.

Not all success comes from innovation.The key is to follow the right path.When necessary,following and imitating are also feasible and effective tactics.Pechoin's Herbal Road is not a new road,but a road to consumer's heart.

Product rebirth: accurate interpretation of brand attributes

The product is the carrier of the brand,and the brand is the soul of the product.Products are the most direct and important means to realize the brand strategy.For this reason,due to the differences in channel formats,Pechoin has enriched its product line and successively introduced herbal skin care products such as “water-like moisturising” and “herbal essence”.The fresh and natural style is closely related to brand attributes and fashion trends,which is quite different from the traditional Pechoin products.After the herbal skin care products were launched,they were well received by customers.

Channel revolution: serial three strategies to success

A very important reason for the failure of new product listing is the mismatch between products,prices and channels.Some enterprises have established their own channel network in the long-term development process,so when introducing new products,they do not consider the compatibility of existing channels with products with different prices and different positioning,and blindly overdraw their channel resources.The entry of new products into the market turns out to be the beginning of brand failure.After completing the packaging of the brand and products,Pechoin resolutely changed the channel to make it more compatible with the products and prices and closer to the target consumer group.

The first strategy: Pechoin adjusted the large circulation that it had painstakingly worked on for many years to a limited circulation channel,but only continued to cover the circulation channel with the classic series of low prices,thus tilting resources to the terminal on a large scale,realizing the leap from circulation to terminal,and returning to the firstline and second-line markets from the third-level and fourth-level markets.It is easier said than done,but few enterprises dare to carry it out and carry it out completely.Countless daily chemical enterprises often fail to stick to it in the process of transformation from circulation to terminal,and finally came within an ace of winning.

At the end of the circulation channels are mostly traditional shops with very limited scale.For the new product,this small terminal can not effectively spread the brand image showing the herbal properties of the product,nor can it achieve close and good contact with the target consumer group.Therefore,traditional circulation channels have become a bottleneck that the product must break through.

After determining the channel strategy,it is bound to carry out the integration and adjustment of the dealer team,requiring new partners to have terminal network resources and operation experience.Pechoin has actively negotiated and cooperated with wellknown KA terminals.It has successively entered Wal-Mart,CR Vanguard,Lotus,Century Hualian,Zhongbai Stores and other KA stores,and has carried out terminal image packaging.The channel reform quickly paid off.As a result,the herbal essence skin care supermarket series introduced by the Pechoin is welcomed by consumers and the sales volume is increasing rapidly,which proves the correctness of the channel selection.

The second strategy: Entering cosmetic boutiques.Over the past years,cosmetic boutiques that are more professional than supermarkets and more common than shopping malls have flourished and become a force to be reckoned with in retail channels.This channel has not only created the so-called G4 regiments such as CHANDO,MEIFUBAO,Proya and Marubi,but also gradually attached importance to multinational brands such as Shiseido,Amore and L 'Oreal.This kind of exclusive store is an indispensable terminal format for consumers to purchase cosmetics,which plays a vital role in establishing brand image of the Pechoin.In order to separate the channel and prevent the prices war,Pechoin has launched a series of air-breathing herbs for exclusive boutiques.Therefore,it is a natural result for it to determine the future core channel as shopping malls and supermarket and boutique system.

The third strategy: Entering e-commerce channels.Online shopping has gradually become an important shopping channel for young consumers.In 2011,Pechoin embraced the Internet and became strategic partners with Tmall,Amazon,Dangdang,Lefeng and JD.com.In “Double 11” event in 2012,Alibaba,Tmall and Taobao had a transaction volume of 19.1 billion yuan on that day,up 260% year-on-year,making offline terminals envious and jealous.Whoever loses the offline terminal loses the present;who loses the e-commerce,who loses the future.

At the beginning of its re-listing,Pechoin paid attention to the expansion of E-commerce,established in-depth cooperation with Taobao,and became a hot brand on Taobao using the strong advertising campaign.Labeling “Taobao” on TV advertisements shows how serious Pechoin is about E-commerce.

What you get is what you earned.Pechoin stocked about 80,000 pieces of products in Tmall's “Double 11” promotion and sold out on the same day.At present,the ranking of e-commerce in the cosmetics category is stable at about 12,which proves the correctness and forward-looking of entering E-commerce channel.

Advertising: old and new media coordination

Focusing on the target consumer group of the emerging 1980s and 1990s generation,Pechoin has made a fruitful combination of TV,Internet,Weibo and traditional exhibition forms to achieve brand communication and promotion information transmission.With one hand grasping sales and the other grasping brands,sales results and brand promotion are closely combined together,thus realizing effective interaction between sales and brands.

In media selection,the most expensive has the lowest cost.Pechoin cares about what its target consumers are most concerned about,so its advertising focuses on the top three TV programs.Since 2010,Pechoin has chosen to place advertisements on Hunan TV's Super Girls and Jiangsu TV's You Are the One.On April 27,2011,it won Hunan TV's 2011 Super Girls advertising top bidder with 9.33 million yuan.In 2012,it chose Zhejiang TV's Voice of China,which continued its original advertising strategy.

It took pains to make the choice of Karen Mok as the spokesperson for the brand.Looking through the brand endorsement history of this long-legged charming star,in cosmetics,she only endorsed P＆G's top skin care brand SK-II in 2005,which is a rare discovery.Compared with countless skin care brands endorsed by stars such as Zhang Manyu,Liu Jialing and Lin Zhiling,she has more development value.The choice of Karen Mok to endorse herbal skin care by the Pechoin plays a key role in the brand positioning and customer group positioning: The ingenious combination of her international charm and Pechoin's oriental beauty quickly attracted the attention of consumers and media,also the attention and purchase intention of young consumers of 1980s and 1990s to the greatest extent.With the popularity of Karen Mok's advertisement for the Pechoin,the classic Pechoin,which has been sleeping in consumers' hearts for a long time,seems to have resurrected overnight,and the attention of the outside world to it has rapidly increased.

In terms of new media,it has stepped up its online marketing efforts.At the level of product promotion,it has even launched on Weibo,the most popular and inexpensive communication machine,including Weibo post,Weibo branding and reposts from Weibo influencers and other store Weibo accounts.The content includes news,promotion events,prize promotion and other information with actual sales content.Among them,in the 100,000-package mailing trial event,nearly 20,000 warm-up messages were sent on September 25 only during the warm-up phase of the event,which was drained to the front page of the store through promotion channels such as diamond booth and direct channel,and the trial activity was warmed up on the front page of the store,and this activity also had the full support of Taobao forum.On the warm-up day,more than 50,000 customers visited the store,and at the peak of 9 a.m.,nearly 9,000 people visited the store.By 3 p.m.,UV (short for unique visitor,which refers to the natural person who visits and browses this web page through the internet) exceeded 180,000,PV (page view) exceeded 820,000,and the return rate of shops reached 9.49%,indicating that a large number of users paid attention to activities during the pre-heat period.The heat of such activities is no less than that of offline terminals.

At the same time,in order to link up the effective integration of traditional media and modern media information,Pechoin carries out secondary communication in the form of advertorial to maximize the advertising effect and realize the resonance of TV advertising,network communication and offline promotion.

Prospect and hidden danger

In the product line structure,besides “natural ＆ non-irritating” skin care,there are also non-core products such as Phoenix glycerin with a retail price of 4 yuan and personal care toilet water.At the same time,the men's series is also lack of rigidity,which weakens the brand attribute positioning.The new force leading the rapid development of the Pechoin is the herbal series.Purifying the brand's products may be the next step.Undeniably,due to factors such as actual sales scale,it has not eliminated the old products that are incompatible with brand attribute positioning.How to further optimize and upgrade the product line structure in the future is a test for brand traders.

There are bound to be three price systems in the three main channels of Pechoin.Consumers have been numb to the conflicts between different

terminal forms and the conflicts between online and offline.This kind of business model that maximizes

the distribution of channel profits only regards consumers as buyers,not as a key link in the business chain.Looking at the famous brands of multinational skin care products,in addition to the Japanese and Korean brands that will be specially customized for a certain channel,European and American brands will always use a single product carrier to connect with consumers,and will always piously launch marketing based on the interests of customers,so as to obtain profits through customers' purchasing.The focus is on “how to sell through the channel” or “how to buy as the customer”,which is actually the ultimate factor in the gap between local brands and multinational brands.

As Pechoin is not a listed company and has no obligation to disclose annual sales,we cannot obtain its real annual sales data.Therefore,it is a matter of life and death whether the huge amount of advertising is a benign investment.

There is a lot of talk in the community,claiming that the big move of Pechoin in 2012,regardless of the cost,is to hype up,gain attention and create influence,and is to sell the brand to foreign companies and charge a good price.If the rumors really turn out to be true,the local daily chemical brand is just another real case of the enterprise “raising a son as a pig” for sale.