Without products, there is no growth.

Do you know the few key decisions about products? For example, what problems do we need to solve, what problems can we solve, how to combine our business, and how to present our products. This article will give you the answers.

The development history of an industry is the development history of product features and benefits, and even more so the differentiation history of product features and benefits. Products are industries, and industries are products.

For enterprises and organizations, no matter how many businesses you have, they should essentially revolve around one thing. From the perspective of the organization, it is called a business, and from the market perspective, each business should be part of the market value and customer value.

The resources of an enterprise are always relatively limited. No enterprise has so many resources that they don't need to be focused. Focusing on one thing or one thing means focusing the resources of the enterprise and concentrating on doing big things. So what is the so-called one thing or one thing?

To answer this question, we should return to the basic questions and basic concepts - what problems do we want to solve and what value can we bring, rather than simply doing addition and subtraction - adding business segments when things are good and subtracting business segments when things are bad.

What problem do we want to solve? This is actually the ultimate question about the meaning of the existence of enterprises. For Jack Ma, it is to make it easy to do business in the world; Musk said that he wants to liberate all mankind.

What problems we want to solve is a choice made based on the company's current capabilities, resources, and endowments. What problems we can solve is based on what problems we want to solve.

On this basis, whether the business can be reorganized and how the business can be presented, in the final analysis, once the product issues are clear, the business can start thinking. Enterprise business is complicated and each department has its own interests. Whether it can be merged into one line is not only a business-level thinking, but also an iteration of cognition.

As a business owner, you need to pay special attention to those decisions in your business - the critical few.

Only when we think deeply enough about the key few decisions, can we make other decisions easily - or even fail by ourselves. On the contrary, if we do not think deeply about the key few decisions, we will always be solving problems instead of solving them - what problems do we want to solve? What problems can we solve? How should our business be combined? How should our products be presented?

1. Category starter

First, start with the category and find the big picture of the business:

The category problem is not just a product problem, but also a market and business situation problem. The starting point of a business should be a big market, because a big market can lead to big business - a big market is the foundation and premise of a big business. Without this premise and foundation, you will find it increasingly difficult to make ends meet.

When you are stretched to the limit, you will find that you made a mistake from the beginning - it is easy to make a big splash, but it is quiet and silent for you to make a big mistake. The same product will have different market territories if you have different ideas about its category concept. Sometimes this difference is not the difference between 1 and 10, but a tragedy of heaven and earth.

For this reason, when people ask me how to make products, I usually ask what your category is and what you think your category should be. Many times, our thinking about products and categories is far from enough, or even wrong.

Create a category or occupy a characteristic. Have you created a category or occupied a characteristic in a category? There are two types of businessmen in this world. One type understands business and does business. They believe in rules and know that business has no past tense or perfect tense, only present tense.

What kind of cognition leads to what kind of behavior, so they know what happened in the past means. There is also a kind of people who do business for the sake of business, but in fact they do not understand what business is, and simply treat trading as business and turn trading into business.

What is business?

Have you created a category or occupied a characteristic in a category? If you still don’t understand what a category is and what a characteristic is, I suggest you stop and think about it. Don’t rush into business but slowly discover the beauty of business. For example: if there is already a leading brand in this category, can you occupy different characteristics?

2. Mobilizing cognitive consensus

Secondly, starting from the concept, mobilize consumers’ cognitive consensus:

After the relationship between products and categories is straightened out, the next step is to start with the concept, with the goal of finding the basis for audience cognition. The concept here must not be a concept that you plan, invent, and innovate behind closed doors: the concept of eating by chewing or holding in the mouth is essentially a fantasy about consumers and audience cognition.

Starting from the concept means starting from the cognition that customers already know. Finding the concept that the audience knows is the source of power. Only when this source of power is found can the concept and cognition be equated. Otherwise, it is a concept imposed by the enterprise, or even a fabricated concept.

Whether from top-down or bottom-up, almost all new consumer brands place their differentiation points on the perceptible product functions, attributes and the benefits they bring, that is, the unique selling points of the products, when they first enter the market.

Rather than other emotional appeals, from the earliest "When you feel sleepy or tired, drink Red Bull" to "Sugar-free sparkling water Yuanqi Forest" and then to "Raw milk, sugar, lactic acid bacteria, nothing else, this is Jane Eyre", without exception, they all chose simple, direct and effective appeals.

When there are categories but no brands (creating new categories), consumers recognize and evaluate brand tone based on product experience.

Brand tone is not a set of fancy adjectives, but a perceptual cognition based on function and experience.

At this stage, the functions of the product and the specific interests of consumers it meets are the biggest differences of the product.

At this stage, being useful, effective and informative are more efficient than being interesting.

• Market introduction period, single-point focus on product selling points (0-1)
• In the market growth stage, amplify product selling points + scenario appeal (1-10)
• Market maturity stage, product selling point + scenario + brand (10-N)

3. Pricing determines life and death

Third, start with pricing and find supporting reasons. Pricing is not a simple number. Pricing is first of all positioning. Only with positioning can there be a support point for price. Who are you serving, showing to, and selling to? As a consumer, you have a budget in mind before buying. And this budget is your lock on the market and customers.

First-rate entrepreneurs know how to set prices. Pricing is a thorough expression of an entrepreneur's commercial penetration, and it is also a judgment of market trends. 19.8 or 39 is ultimately a reason for purchase, and this reason for purchase comes from the understanding of positioning from beginning to end. Third-rate companies are engaged in price wars.

Let’s look at a math problem first: What does it mean for a company if it can increase its product prices by an average of 2%, keeping sales volume and costs unchanged?

• Amazon's corporate profits will grow 276.2%
• Honda Motor could boost profits by 65.2%
• HP's profit can be increased by 37.9%

In the 4Ps of marketing, products can be discussed in terms of packaging and visual effects; channels can be discussed in terms of bonuses and mass penetration; promotion can be discussed in terms of content and KOLs. However, when it comes to price, there seems to be nothing to talk about. Often, the more obvious something is, the less likely it is to be discovered.

Genuine goods, good quality and low price, good products are not cheap, cost-effectiveness, behind these familiar words are all talking about prices. The top ability of an entrepreneur is the sense of pricing. First-class companies can set prices, second-class companies do promotions, and third-class companies are Pinduoduo.

4. Channels should be detailed and deep

That is: surface penetration (channel penetration + mind penetration): focus on the origin population, penetrate the origin channels, thoroughly explore the origin market, and establish a base.

Lao Xiang Ji opened more than 400 stores in Anhui before it felt comfortable and bold to move out of Anhui; Yan Yue Se focused on Changsha, and at its peak it could be said that there was a store every ten steps. Only when the Changsha market was narrow and deep enough did Cha Yan Yue Se, like Lao Xiang Ji, gradually move out of its base.

Cha Yan Yue Se has 2.2 times more stores in Changsha than CoCo and 1DianDian, and 2.7 times more than Shuyi Shaoxiancao and Mixue Bingcheng. The total number of stores in the three major districts of Tianxin, Yuelu and Furong is 142, and the number of stores in Tianxin District has reached 63, making it the administrative district with the largest number of stores.

In business wars, the advantage often belongs to the defending party. If there is no absolute advantage in military strength, it is difficult for the attacking party to gain an advantage over the defender. To win, at least three times as many troops as the opponent must be deployed at the attacking location. - "Business War"

For example, Dayao:

On the channel side, Dayao typically fights a flanking war. It first enters the marginal catering market to lure people in. Large catering and chain catering have high barriers to entry and high costs. In the early stage, Dayao chose single stores, husband-and-wife stores, barbecue restaurants, and fly restaurants. These stores have low barriers to entry and are easy to negotiate with.

Of course, being easy to talk to is just on the surface. The most important thing is that your products can make these restaurants make money. Judging from Dayao’s own data, its main sales force comes from these small restaurants, accounting for as much as 80% at the highest.

In the same situation of selling goods, it is not important whose goods are sold, but whose goods can make more money. After all, the profit of catering and alcoholic beverages is still an important part of catering revenue. In terms of catering channels, Dayao is ahead of Yuanqi Forest. Dayao's hundreds of thousands of catering stores are exactly what Yuanqi Forest wants.

• In 2019, e-commerce platforms accounted for only 3.4% of the sales channels in China's beverage industry, while offline channels accounted for 96.6%.
• 7-Eleven data shows that consumers aged 20 to 40 account for 88% of the convenience store consumer population.
• There are currently about 6.8 million mom-and-pop stores in China, with 800-1,500 SKUs and 2-3 brands in each product category.

In the vast Chinese market, mom-and-pop stores, grocery stores, retail stores, restaurants, and tobacco and liquor stores still occupy a large share. Build brands in first- and second-tier cities, and collect profits in third-, fourth-, and fifth-tier cities. Build brands in KA stores, and make money in mom-and-pop stores, grocery stores, and tobacco and liquor stores. Do it in detail and in depth.

——This is the eternal business logic

Author: Lao Gao (staying in Houshan)

Source: WeChat official account: Lao Gao Business and Brand (ID: PPD6977)