Lining Encountered The Market "Embarrassment" Bureau Brand Effect Is Not Expected.

Two years ago, the Li Ning Co was ambitious - to make Lining a world-class player in the next 10 years.

At that time, they expected to become the world's top 5 Sports Brand Company in 8 years.

But two years later, Lining, the founder of the Li Ning Co, "the prince of gymnastics", was very embarrassed.

Following the 3 sharp decline in operating income, gross profit and net profit in 2011, and the loss of the first brand of domestic sports brands, the performance of Li Ning Co continued to deteriorate after 2012.

According to the latest announcement issued by Li Ning Co, the order amount of the company's shoes products decreased by double digits in the first half of this year, while the annual decline of clothing products was more than 20%. So far, the net profit of Lining has dropped to the end of the 5 mainland sporting goods companies listed in Hong Kong.

Affected by this, the net profit of Li Ning Co in 2012 will decline substantially compared with the same period last year.

Brand remolding and channel reform

With the help

In the way of "flying trapeze", the strong marketing offensive created by the Beijing Olympic flame was ignited. Li Ning Co's products once pulled the international rival Adidas off the horse and sat on the top of the domestic marketing volume, but the next change brought Li Ning Co a huge headache.

After the Olympic flame extinguished in Beijing, the Li Ning Co released the strategy of "brand remolding" and "channel pformation" as the main content.

It is seen that not only is the slogan of the Li Ning Co "everything possible".

Change to "let change happen" (Makethechange).

The intention of Li Ning Co brand remolding is very obvious, that is, to greatly enhance brand value, and use the "90 after" new knowledge and new sense of consumption characteristics to directly get the brand mental status, and complete the magnificent turn from cost driven business mode to value driven business mode.

Corresponding to brand remolding, Li Ning Co's strategic thinking of channel change is also very clear, that is, by integrating some smaller and less efficient distributors, we can improve the professional degree of operation and optimize the allocation of resources in scale, so as to realize the pformation from vertical growth to horizontal growth.

Statistics show that Li Ning Co has 129 distributors and more than 2000 distributors. About 1700 of them operate on average only 1 stores. Most of the spatial images can not reach the display level of standard stores, and sales service level is low. It is very difficult to timely merge and degrade products, and the turnover speed of goods is also very poor.

According to Lining's assumption, the integration of dealers will take about 500~600 a year.

Change unbecoming first

The fact that the two years have not changed is the best footnote to Li Ning Co's strategic adjustment effect.

On the one hand, while changing the signs and slogans, Li Ning Co repositioned the customer group and targeted the "post-90s" as a wrong decision at the wrong time.

The observation shows that the visual impression of Lining products to consumers is generally conservative and conservative. But for Chinese consumers, especially the younger generation, if they can afford foreign brands, most people will not be willing to spend almost the same price to buy domestic brands.

The key is that a market survey shows that Lining's mainstream consumer groups are concentrated in two or three line cities, with an average age of 35 to 40 years.

Obviously, while trying to cater for the "90's" consumer market preference, Lining abandoned and lost loyal customers.

In addition to the damage of brand remolding strategy to the loyalty of original customers, the Li Ning Co has made a risky decision because it is eager to change from price market to value market.

Statistics show that in the past two years, Li Ning Co has made three price increases for footwear and clothing products, of which footwear products have been increased by 25.9%, and clothing products have increased by 36.5%.

Although the price difference between Lining brand products and foreign brands such as Nike and Adidas has been shrinking after the increase in price, but because the main customer groups of Lining brand are still concentrated in the two or three line cities, and because of the style, experience and marketing methods of products do not follow up simultaneously, the continuous increase in price behavior makes Lining's original cost performance advantage none, and those consumers who are already very sensitive to price have to turn to the domestic sports brands with high cost performance, such as Anta and PEAK.

Channel change strategy also criticized many.

As the terminal sales ability is still the key to the success of local brand enterprises, Lining is undoubtedly right by promoting the strength of the merger and reorganization of distributors, and ultimately improving the management level of the retail network.

However, because some distributors who have fewer stores and smaller business areas are merged by higher dealers, this will inevitably cause some distributors to have a psychological conflict. At the same time, some old channel operators often have an inertia. They are very aware of the original consumers. In order to prevent the loss of old customers, they will generally have difficulty in choosing advanced styles or holding a wait-and-see attitude.

Not only that, after Lining made such a huge channel change action, it may also trigger some channel businesses' "anti water", which may not only affect sales volume, but also allow competitors to take advantage of the dealer's pfer to others.

"Embarrassment" is ambiguous in product function.

It is worth noting that for the market "embarrassment" bureau, Li Ning Co has laid a "breakthrough" posture, such as large-scale layoffs, the addition of factory shops and discount stores, attracting the world's leading private equity investment company TPG's accession.

But looking at the correction path of Li Ning Co, we still stay on the "surgical operation". From the perspective of permanent cure, Lining should shift more concentrated vision to internal reengineering.

On the contrary, Lining has been swaying between sports and leisure in the functional positioning of products. Such vague positioning can neither grasp its customers nor even cultivate loyal consumers.

Moreover, Lining is also a hot spot in the positioning of brand personality.

According to the survey conducted by Gallup for Lining, consumers think that "Lining" is like a friend with a bad character beside him. He feels very friendly and familiar, but lacks a distinct personality.