On January 8, 2019, Mr. Yang Hongchun, founder and chairman of Liangpin Shop, stressed at the press conference that "the 'high-end snack' strategy of Liangpin Shop is not aimed at high prices, but at the concept of high value."
In December of the same year, Borgward Automobile launched a new advertisement, humorous copywriting and passionate expression style, so that this "good · expensive" magic advertisement quickly exploded. The slogan basically means: good products should be expensive.
Whose view is right?
It's up to the consumer to decide - and the consumer's answer is: "We need a high quality product, preferably at a low price."
When companies tell consumers, "My product is better and the price is lower," consumers are usually dismissive. It is illogical for a high quality product to be sold at a low price to the consumer. They will think that the enterprise is not a public welfare organization, and the low price must not use high-quality materials or advanced technology.
First, the illusion of consumption upgrading
"Consumption upgrade" leads Chinese enterprises to fall into the marketing trap of "meeting customer needs". Consumption upgrading is not a topic only today, before this was talking about consumption upgrading, the future will not stop on the topic of consumption upgrading.
Home building materials companies should not discuss. However, they collectively fell into the trap of "consumption upgrading" between 2015 and 2018, and flocked to create a "high-end" positioning.
Why are companies keen to create "premium" brands? Why are consumers interested in high-end brands? Whether consumers can afford it or not, they maintain a strong appetite for high-end brands.
Second, two driving forces for consumers to buy high-end brands
- The first is cognitive drive
Consumers have a tendency to equate price with quality, believing that high prices should be "worth it." Smart entrepreneurs understand this, and they use preexisting ideas in the minds of customers to create high-end brands and make easy profits.
Another factor driving cognition is differentiation, and "premium" brands in many categories can help brands establish a distinction in the minds of consumers and enhance their mental status, thereby creating quality customers.
- Then there's the social drive
Social need is a powerful social force. "Security" is the first major interest pursued by the mind, and it is also the most basic human needs. "Status" is the second most important benefit that the mind seeks, and it is also more valued and controlled in social relations. Therefore, the value of high-end brands is to meet the psychological needs of customers in pursuit of status to a large extent.
For consumers, when buying goods, they should consider the quality and service of the goods, and the pursuit of high-end brands should not only consider the quality and service, but also the pursuit of spiritual benefits, that is, let others see that you are using the brand and establish social value. Therefore, high-end brands must consider the cognitive drive and social drive two aspects, the two can not be separated.
Mr. Lei Jun, the founder of Xiaomi, is a smart man, he is very clear that the brand has its own "social currency" attributes, "young people's first TV" and "young people's first mobile phone" and other marketing concepts, which he created to help buyers resist social discrimination and enhance social status.
Third, two driving forces for entrepreneurs to build high-end brands
- The first is driven by feelings
There is a common sentiment among Chinese entrepreneurs: to create high-end brands. In China, making low-end products can seem unpalatable. They believe that high-end brands are brands and have brand value, otherwise they will be considered to produce cheap products and will not be respected. From this point, it also proves that high-end brands have social value.
Or is it?
In fact, the value, influence and prospects of many high-end brands are far less than that of mass brands.
Take cars as an example, the British Rolls-Royce car is famous for luxury, but it has little action in the car market, and finally sold at a low price. Maserati is an Italian luxury car manufacturer that was sold to Fiat in 1993.
The same is true of the clothing industry. The brands that make a lot of money are almost always mass brands. Japan's richest man is making clothes that ordinary people can afford. Germany's richest man is the boss of low-cost supermarket Aldi. Low-cost clothing brand: ZARA has become the richest man in Europe and once the richest man in the world, Mr. Ortega.
Don't get me wrong, high-end brands are not uncompetitive, but to look at high-end brands reasonably.
- The second is profit-driven
If you go upmarket, you can create and maintain healthy profits and markets. Higher profits allow companies to spend more on marketing, which can create more prestige.
Instead, trying to be the cheapest is a race. Someone can always make it or sell it cheaper. Forcing companies to reduce costs or quality. However, building a "premium" brand can create lasting demand and even desire for a company's products.
