Ma Zhenshan: Anxiety Could Even be Amplified Without the Brand

Core view:

The corporate’s brand strategy must follow correct logics. It is the brand that attracts customers, guide technical directions and routes and lays foundation for business modes. All aspects of corporate management shall take the brand, as well as customers, as the core. Only by being led by the brand strategy, can an enterprise be “scrambled in appearance but united in spirit”. 

Main body:

There is nothing more than the “anxiety” that can well describe China’s current automobile industry. 

Under the continuous influence of COVID-19, the anxiety of different automobile brands in this year may be different from each other. But all are attributed to: unsatisfactory sales volume and falling profit margin.  

Therefore, new marketing means, which may be chosen unwisely by the desperate ones, are prevailing in this industry. “No matter what, at least give it a shot”, this time the automobile industry isn’t the last one to gain hindsight: the innovation methods on the market, such as the meta universe layout, NFT products, private communities and closed-loop ecology, have all become the testing ground for major automobile enterprises.

So bustling and yet vivid.

Fireworks are destined to disappear at the blink of an eye. After the prosperity fades away eventually, those who are anxious will only become overwhelmed by even greater anxiety. Why? 

“Anxiety” is the epochal symbol of intelligent cars

Almost every manufacturer is undergoing a tormented suffering. Even the previous good sellers are faced with declining sales volume, not even mention those with small sales volume, and some have already been gone secretly. The financial pressure has been keeping the new automobile manufacturers on the anxious seats, the raw materials of batteries are incredibly expensive, the price of chips is rising continuously, which make it hopeless to profit as expected. In recent years, the overall market has been producing around 20 million vehicles annually. This April, the number of insured passenger vehicles on the market was 990,000, a month-on-month drop of 38%, and the penetration rate of new energy vehicles at the end of April was 27%. It seems that the passenger car market is in the transition period from traditional energy to new energy, and the industry is almost immersing in anxiety, both because China’s passenger car market is basically a stock market, whose market structure is undergoing profound changes.    

Could innovation in market means (tactics) become a panacea against anxiety?

The incremental market has gone through 30 years, while the stock market exists for only 3 years. The automobile industry has not been fully prepared for structural changes. Seeing others go for private communities and closed-loop customer operation, I then follow the lead right afterwards; when others turn to the meta universe, we are ready to launch our NFT tomorrow. Data shows that the proportion of automobile enterprises’ investment in innovative marketing has increased by more than 10 percentage points. What’s more, some new brands have invested most of their marketing expenses in innovation. However, as a matter of fact, after inquiring information links for three times and making comparisons for four times at least in order to make a decision, a user will not tend to visit a store, or place a small or a large order simply because of a manufacturer’s innovative means. This is due to the fact that vehicles are costly and low-frequency commodities, the trade-up of which is not a “quick stimulus”, but a “slow process of rationalizing”. Therefore, many peers once complained that even customers introduced from private fields could not count for the mainstream. To speak frankly, we go all-in on innovation, attempting to achieve instant results and defeat thousands of competitors overnight. The outcome is unsatisfactory, we are just like a drowning man grasping at any straw.

Causes of anxiety around the automobile market

Layman – following the trend blindly from beginning to end – self-denial – giving up easily for fear of a slight risk. It is assumed that our colleagues will “smile with understanding” after reading this. And the colleagues from the terminal delivery side will heave a “sigh”. Why?

We have to focus on: low sales volume and poor profitability. The basic reason is that products yearn for brand power. Low sales volume means low awareness and you (your products) are not in a customer’s purchase list; profit difference means low pricing and large discount. The core reason is that your brand has no worth in the eyes of customers. Affected by the week brand attraction, basically your sales can only rely on the cost performance.

Historical experience shows that when a car brand loses its cost-effectiveness ratio, it will be sentenced to death. We often toss the question back to ourselves: what is the most important in this highly intense era of intelligent cars? Core technology, operating system, financing scale, customer satisfaction… But if such core competitiveness is decoupled from brand building, and then from winning user trust, improving product premium, and forming an invaluable asset for the long-term development of the enterprise, it will be extremely difficult for the enterprise to survive at the fierce business war.

To conclude, I believe that enterprises can only win and survive in the stock market by dominating the overall situation with brand strategy. For the first time in 30 years, this urgent observation is no longer treated as an idle theory, but has been presented in front of decision-makers of automobile enterprises. This article intends to trace the sources, explore the essence of marketing, and find a marketing way for automobile enterprises to forge ahead towards the future.

Weak brand power is caused by biased understanding

Customer orientation needs to be truly understood and practiced, otherwise it will be easy to go south. Customers are the most important, almost every manufacturer is saying this, but this should not just be verbal or take whatever a customer says seriously. Some brands turn a blind eye to the problems existing in their products, services and brands. Regardless of the huge gap, they won’t admit or confess because of self-esteem; some brands think that they have held customer symposiums to satisfy whatever a customer needs. Iteration is fast, but why can’t they get out of the swamp? From the voice of customers to product expression, in addition to iteration, more steps need to be taken: how to comprehend the needs expressed by consumers? How to eliminate the false and retain the true? And how to classify?

Is our product development strategy to satisfy customer needs or lead customer needs? Most of the product design and development of powerful brands are based on customer needs, but on such basis, they would lead through innovation. As the traditional voice of customers and comparative test drive are only basic means, the real customer experience, scene setting and new technology application come from interdisciplinary and hard research and development, rather than simply stacking equipment and adding several functions in one move.

 In my opinion, behind customer-orientation, there must be supportive systems, such as new technology transformation and customer need transformation. 

The right way for a brand is to lead through innovation

Both the customer-satisfier-type and the competitor-follower-type are temporary expedients. My mutual complement theory between marketing and product strength shows that: consumers would scramble for products with strong product strength. Product popularity and recognition will be boosted even without excessive marketing; and for some products, even if they cost more money, consumers would hardly be interested.

We all have smelled perfume. Some may have high concentration, but are in contrary not so welcome; whereas some may not have such high concentration, but smell extremely good. Here is the secret of brands and brand building: bees are attracted by flowers, just like consumers are attracted by brands; and the right strategy is to knock on the door proactively.

Attraction can be divided into two levels: strength and charm. Being strong and charming can attract more bees to collect honey. So, we should build the strength and charm of brand attraction. In the era of intelligent cars, our solution is to build a parent brand and a product sub-brand that are strongly attractive to consumers.

The logic correctness led by the brand is the key to success

The corporate’s brand strategy must follow correct logics. It is the brand that attracts customers, guide technical directions and routes and lays foundation for business modes. All aspects of corporate management shall take the brand, as well as customers, as the core. Only by being led by the brand strategy, can an enterprise be “scrambled in appearance but united in spirit”. 

This has also been verified through the successful practice of international brand management. The clear brand positioning of Volkswagen Group and Toyota has enabled  them to successfully achieve differentiation under the coordination of technology and cost; their globalization strategies are the models for automobile enterprises.

The excellent brand strategy operation team is like the conductor of a symphony orchestra. We need to master several modules and use them freely: brand operation system, core technology, supply chain, manufacturing, cost, capital system; during the operation of the system, constantly convey structured content, stimulate external associations, heated discussions, interactions, praises and dreams of the brand, and highlights and accumulates the positive potential of the brand for external stakeholders. We should be familiar with the applicability and attributes of the new traffic platform, and follow social public opinions, so as to capture the best timing and opportunities.

To achieve staged brand building can be tough

  Brand building is systematic construction. Consumers are becoming increasingly emotional, and each commodity actually contains two levels as being physical and metaphysical. Being physical involves with physics and function, while being metaphysical involves with emotion, dream, imagination and scene. A brand needs its own vision, values, positioning, personality, voice, slogan and visual system; it also needs to represent people, stories, events, activities and IPs. A brand should even have its own words, fonts, etc.

Brand building is a long-term investment. Deliverables to customers must be an inseparable combination of dreams, emotions, scenes, functions, vision, dynamic and static performance and ecology. Brand building is a long-term and continuous process, which cannot be realized in a fleeting time.

Brand building must respect science. Communication, aesthetics, psychology, sociology, politics, new technologies, new policies… Brand practice involves all aspects. Only by respecting science, being realistic and pragmatic can we pioneer and innovate.

Brand building should tolerate with trials and mistakes. Be bold enough to try and make mistakes, and grow through learning from the mistakes. To some extent, the winner is actually the one who makes fewer mistakes.

Next time, we will talk about the real practices to fight against anxiety in the market.

Author: Ma Zhenshan, General Manager Assistant of Chery Automobile Co., Ltd., Deputy President of Chery Jaguar Land Rover Co., Ltd. 

Co-authored by: Yang Make, Chief Researcher of Shouyuxing Intelligent Car Research Institute