New Lining Dilemma: High-End Brand Positioning

Long distance to grow

According to Lining CEO Zhang Zhiyong, as early as May 2007, Lining had already begun.

In the 2006-2007 year, Li Ning Co consumer

When the brand remodeling of the enterprise was pushed to the market, its new LOGO was criticized like tide.

"If we throw away the strategic significance of changing the label to the brand, from the perspective of logo design, Lining will fail to change the label."

An insider commented.

Compared with the mild expression of the advertisers, the evaluation of netizens is more spicy and direct. "Like a logo of a second class brand", "not surpassing the LOGO in front is a retrogression."

Many netizens believe that Lining's new LOGO "Shanzhai" used to be Lining. "I recently bought a Lining and was told that LOGO had changed. It was even more depressed to buy a piece back and be mistaken for piracy."

At the same time, the new slogan of "Make The Change" is generally considered not as good as "everything is possible" atmosphere.

In order to cooperate with the "brand remodeling plan", Li Ning Co has chosen to broadcast advertisements with the theme of "post-90s" frequently in various media, so as to approach young consumers.

But at the same time, it has also led to the loss of "70 after" and "80 generation" consumers, so many people therefore claim to boycott Lining.

Professionals believe that for any large enterprise, brand remolding should not change overnight.

Because in today's highly sensitive market, old customers may not be able to adapt to the new brand image. At the same time, new customers who are chased by other companies have yet to turn around.

This is a big gamble.

Pressure to raise prices

Lining's new strategy is also trying to match the multinational brand by price.

In April 2010, Li Ning Co announced the first increase in footwear products by 11.1% and 7.6% in clothing products. In June 2010, Li Ning Co announced that the average selling price of footwear products increased by 7.8%, and clothing products increased by 17.9%.

In September 2010, Li Ning Co announced that footwear and clothing products were raised by more than 7% and 11% respectively.

Zhang Zhiyong hopes that the price gap with Nike will be smaller and smaller, and it is likely to be less than 10% in the future.

The new strategy shows that Lining is trying to get rid of his earlier image as a cheap substitute for multinational brands and pform to a more high-end brand.

Zhang Zhiyong said that in the next 20 years, Li Ning Co should not only be the leader of the Chinese market, but also the top five of the world sporting goods market.

The rise in Li Ning Co prices in the domestic market has gradually shaken.

The main market of Li Ning Co is the two or three line market in China, which is a market that pays great attention to cost performance.

Li Ning Co's continuous price raising makes the price performance of the products more and more blurred, and the sales growth is decreasing gradually.

The company's three quarterly report in 2010 showed that in the three quarter of 2010, the same store sales revenue increased by 4% in the three quarter, while sales growth in the first quarter of 2010 and the first half of 2010 were 5% and 4.6% respectively.

Compared to the actual market share, Zhang Zhiyong is more concerned about the "brain share": "for example, consumers who usually only afford to buy Volkswagen will still like the brand of Porsche. When he is rich and can afford it, the share of the mind will affect the market share at this time.

Price increases will have adverse effects at this stage, but brand increases can increase the share of consumers' brains. "

Less expensive "after 90"

According to a survey conducted by the relevant agencies for "post-90s", "90's" favorite brand of sports shoes are Nike and Adidas. The favorite digital product is apple. They are called new consumption owners. In the "post-90s" mentality, Lining is still the best among local brands.

Dong Bin's view of "post-90s" is representative. He admits that he occasionally buys Lining's goods, but he is not a loyal "fan".

The main reason is that Lining's products are expensive.

Dong Bin said, or is expensive but famous ADI, Nike, or the price is right, nor is it a "drop" Anta, XTEP.

"Lining has no special advantage and competitiveness."

Of course, if Lining has his own commodity, he will still consider buying it, Dong Bin said.

Similar to the "post-90s" on the pformation of the unacceptable, Li Ning Co earlier response has been psychologically prepared, I believe that after a period of running in and debugging, like Lining new products, new logo will be more and more people.

Zhang Zhiyong also said that the company is planning to launch a clothing series with the old logo within two years, which will bring nostalgia to the supporters who are now running instead of running.

But this is allowed to be seen as a shift in the focus of Lining's product, which has been unsuccessful in a series of actions that are close to the young consumer group. The company has made adjustments to ease the pressure on business weakness.

The pain of channel pformation

After changing the standard, Lining brand will officially appear in the first tier cities, opening 70 sixth generation flagship stores in Beijing, Shanghai, Guangzhou, Shenzhen and other places, and compete with Nike and other international brands.

The previous channels will be integrated accordingly.

Unlike Anta sports and other companies, Lining sells products in the form of exclusive distribution, that is, distributors will not set up special stores with "Lining brand", but sell other brand products at the same time.

At present, Lining has more than 129 distributors and over 2000 distributors. Most of them are small in scale, and they manage 1-2 stores on average.

Bank of China international survey of Lining recently found that Lining's basic situation is not optimistic.

The company's sales channels in small and medium-sized cities are faced with certain structural problems.

At present, there are about 2000 retail outlets operated by distributors.

Most of these stores do not perform well in commodity procurement and inventory management, and too much inventory of old goods leads to the sale of new products after they are launched.

Zhang Zhiyong said that the group had earlier proposed to reform its distribution system, aiming to solve the problems faced by the retail sector and enhance the growth of same store sales.

According to information disclosed by Lining, the number of distributors will be reduced by about 30% in the restructuring plan proposed by Lining management.

Analysis of the industry, the number of Lining shop may reach 500~600.

As of June 30, 2010, there were 7478 shops in Lining brand.

Haitong international analysts believe that "closing stores will affect some distributors' orders next year, and some distributors are worried about being turned off, so they will not order next year at the order meeting".

But Zhang Zhiyong said, "although these measures will bring short-term pain, the next two quarters, Lining brand orders may still face some pressure, but this will help the group long-term, stable and healthy development."

Worst result

It is normal for a brand to change its bid, and Nike, Adidas, Coca-Cola, Pepsi Cola and other big tycoons are easy to label.

But the replacement is only the first step in the change of enterprises. More changes should be made in the deep pformation of enterprise innovation.

Lining wants to become a pnational brand like Nike and Adidas, but it is still a domestic brand in the eyes of consumers of "80" and "90" consumers. When the distance between them has not been solved well, Lining has made changes in raising prices and selling channels, which has lost both consumers and dealers, which may be the worst result.

On the other hand, international brand moves are much faster than expected.

Soon after Li Ningxin's brand strategy was released, they lowered their value and began to sink to the two or three tier city.

In August 2010, Nike launched 300 yuan low price shoes, which is 25% lower than the current price.

According to the survey, the most affordable footwear in China's two or three tier cities is priced at 170 yuan ~250 yuan. As an international brand, Nike is priced at 300 yuan, which will still attract the "post-90s" generation pursuing the brand, which happens to be Lining's target consumer group.

With the growth of the first tier cities in China and the fact that international and domestic brands have been sinking two or three line cities, Lining is facing the risk of being left behind.

But in the face of such a dangerous market environment in China, Lining's development focus is international.

According to the usual "internationalization" standard, the contribution rate of overseas market to the company's business has reached 20%. At present, Lining's overseas contribution rate is less than 2%. The long growth distance makes Lining likely to fall into the dilemma of domestic failure and internationalization.

link

Rees, the father of location:

"For Lining, a better strategy is to have two brands: a high-end, a low end.

High end brands can compete with Nike and Adidas on the global market, and low-end brands can compete with other local brands in the Chinese market.

"The longer the preparation stage before Lining's internationalization, the weaker the international positioning of his brand.

The 2008 Beijing Olympic Games was a great opportunity for Lining to build a global brand. At that time, every athlete in the world was concerned about the competitions in China.

However, the positive cognition created by Beijing Olympic Games for Lining is gradually fading away.