Heng Yuan Xiang Relies On Brand Operation And Growth.

Rats, cows, cows... "Pigs and pigs", referring to Heng Yuan Xiang, many people first reaction is that the 1 minutes of advertising, almost barbarous pour, attracted numerous shelling. Heng Yuan Xiang has poured money into sponsoring the Olympic Games, but the design of the Chinese team's dress has caused many controversies and is known as "scrambled eggs with tomatoes". However, Heng Yuan Xiang has risen quietly amid numerous doubts. According to the press survey, in 2007, the annual sales volume of Heng Yuan Xiang union exceeded 5 billion yuan, and its annual sales volume exceeded 36 million. In June 22, 2008, the world brand laboratory released the list of China's 50 (net value) 0 most valuable brands. Heng Yuan Xiang's brand value jumped from 9 billion 458 million yuan in 2006 to 9 billion 458 million yuan, ranking 273 from 64 to 64, becoming the fastest growing brand in the domestic textile industry. As a matter of fact, there are some companies like Heng Yuan Xiang in China. They start from the grassroots, understand the complicated national conditions, understand and explore the market with their own wisdom, and their business models are slowly evolving. Behind the voice of "cattle, cattle, sheep, sheep and sheep", there must be something more important in supporting the growth of Heng Yuan Xiang. And the growth of high speed may make people forget the stubbornness of Heng Yuan Xiang's washing his feet. Jump out of these disputes and focus on what kind of company is Heng Yuan Xiang? This reporter went to Shanghai Heng Yuan Xiang (Group) company's interview, to outline the outline of Heng Yuan Xiang complex. Today, Heng Yuan Xiang is an enterprise cluster. In this joint body, brand building, product production and product sales are the three links, which are professional division of labor and close cooperation. Heng Yuan Xiang group only focuses on brand operation. Heng Yuan Xiang group, which is located in a brand operator, does not invest in factories or invest in construction channels. Instead, it has developed more than 100 franchised factories in the upstream, and has been able to effectively integrate, mobilize and optimize upstream and downstream resources through franchising. It has been able to effectively integrate, mobilize and optimize upstream and downstream resources; as a group headquarters, it has more than 10 wholly owned subsidiaries in Shanghai, such as knitwear, apparel, home textiles, underwear, etc., but these companies do not directly produce products and sales products, but are responsible for shaping and maintaining related brands, as well as control and coordination of upstream affiliate factories and downstream market sales; Heng Heng Yuan Xiang Group has only more than 170 employees, while the entire Heng Yuan Xiang employs 50 thousand people in about 5000000000. Many of its bright spots left a deep impression on reporters: a Heng Yuan Xiang brand, leveraging the actual sales volume of about 5000000000 yuan; If we overlook the "Heng Yuan Xiang" joint fleet from high altitude, the flagship of this joint fleet is Shanghai Heng Yuan Xiang (Group) Limited; while 70% of the main fleet is concentrated in Jiangsu and Zhejiang provinces, with nearly 70 allied factories and the remaining affiliates distributed throughout the country; and more than 9000 distribution outlets, like frigates and escorts, are distributed in large, medium and small cities in nearly 30 provinces throughout the country. The flagship steers ahead, releases commercial instructions, and the main fleet and escort fleet interact with each other, and the joint fleet runs smoothly and rapidly. "Heng Yuan Xiang's brand value chain model is worth learning from leading enterprises in every sub market in China." Lou Xiangpeng, President of the famous marketing practice in twenty-first Century and President of Fulai marketing organization, said. He analyses that in recent years, domestic export manufacturing enterprises and export-oriented trading enterprises have encountered unprecedented difficulties: business is more difficult to do, orders are reduced, accounts receivable increased year by year. In fact, in the past few years, domestic foreign trade enterprises have missed the opportunity to transform the domestic market while continuing to consolidate foreign markets. To develop the domestic market, we must never walk the old way of "OEM". We need to brand, but how to build a brand? Through what mode to build brand? Heng Yuan Xiang can create a brand value and create a brand value chain model, which is worth learning from, because it is an advanced mode that can create value for every link of the industrial chain. The "two-way virtual" is the key to the Heng Yuan Xiang model. Heng Yuan Xiang group not only dummy the upstream manufacturing links, but also dump the downstream sales links. This mode is more thorough than the "one-way virtual mode" that the upper reaches of the manufacturing sector virtually go out. Now that Heng Yuan Xiang has made the "two-way virtual model" and made it so durable, the leading domestic enterprises that are as good as Heng Yuan Xiang can also go through. The "brand value chain" buildup of warships is different from the expansion of the vast majority of enterprises in China. Heng Yuan Xiang is bigger and stronger, and has no direct investment in building factories and channels, nor holding and annexing other enterprises. It is not realized through capital paths and tangible methods. Instead, it is based on brand as a link and intangible assets to mobilize tangible assets, and a strong consortium is formed on the basis of voluntary, self-discipline and compliance of enterprises. Careful analysis of the development process and operation process of Heng Yuan Xiang consortium can be found that Heng Yuan Xiang can develop from a small state-owned shop in 1987 to a large enterprise cluster. The key is that Heng Yuan Xiang leveraged the huge social tangible assets by brand advantage and established a new brand value chain. The new brand value chain, which is built by Heng Yuan Xiang, "tail on the ground and in the clouds in the first place", is a "brand operator + product manufacturer + product seller" integrated operation of the enterprise cluster. In this joint, brand operators take the lead. They are mainly responsible for the operation of intangible assets. They rely on brand and brand value, and gradually collect product manufacturers and product distributors through the form of franchise. Product manufacturers and product distributors are subordinate to the operation of tangible assets. They accept the concept, mode and management of brand operators. Although the three assets are fictitious in assets, they are consistent in strategy and close and even rigid in management. We can find that Heng Yuan Xiang's business strategy is not to spend a penny to buy land, build factories and buy equipment, but only to find ready to do enterprises and cooperate with them. Heng Yuan Xiang allows all the companies to accept Heng Yuan Xiang's mode, brand concept, scientific and technological means and system management measures. Heng Yuan Xiang Group does not directly invest a penny in all the franchisee enterprises. Instead, it inputs intangible assets in all franchisee enterprises, namely brand output, product quality specification, product sales market rules, brand maintenance. On the surface, these jobs have no direct economic benefits, but with these they can control and control tangible assets. Heng Yuan Xiang believes that it is more important to create brand value, enhance brand image and create brand value chain, and rely on intangible assets to drive tangible assets to realize value. Reporter investigation found that collecting royalties and realisation of brand assets are the main source of profit for Heng Yuan Xiang. In 2007, Heng Yuan Xiang's sales volume was 300 million yuan, while the royalty rate of the company from upstream joining the factory was 266 million yuan, and the royalty rate accounted for more than 80% of the company's annual revenue. At the same time, collecting affiliate fees from downstream dealers or distribution outlets is also one of the source of profits for the company. In addition, the total amount of $1 million that each factory joins to enter the Heng Yuan Xiang joint venture will provide a long term "cash pool" of 100 million yuan for Heng Yuan Xiang. As a company that runs trademark and operation brand, how much money does each brand of floral, light and narrow strip brand earn on each piece of clothing? In 2007, Heng Yuan Xiang earned 266 million yuan in revenue. This achievement was achieved in the trademark authorization of about 36000000 products sold by Heng Yuan Xiang group. The average trade mark fee charged by Heng Yuan Xiang was 7.4 yuan / piece. The average terminal price of each piece of Heng Yuan Xiang is about 116 yuan / piece (calculated according to the 2005 public sales volume of Heng Yuan Xiang, nearly 4 billion yuan, and 34 million of the annual sales of goods). In cooperation with manufacturers and distributors, Heng Yuan Xiang Group's share of the average sales revenue received by each brand is 6%. In the textile industry with a low threshold, fierce competition and thin profit margins, this profitability has been very difficult. The operation of such a large and complex consortium of upstream and downstream risk management has posed a severe test to Heng Yuan Xiang. In the more than 10 years of shaping and running the consortium, Heng Yuan Xiang has encountered many problems, such as external counterfeiting and shoddy, internal interests and so on. The most serious cases have also occurred, for example, if Heng Yuan Xiang's affiliate factory does not send the products produced to Heng Yuan Xiang's quality inspection factory for product inspection and trademark, instead, it will sell its own counterfeit Heng Yuan Xiang brand. Alternatively, downstream dealers do not purchase goods from Heng Yuan Xiang's quality inspection plant, but entrust other enterprises to produce, and affix their own counterfeit Heng Yuan Xiang brand to sell. After years of experience, the management and control of Heng Yuan Xiang's Federation has been institutionalized, regular and specialized. First of all, in order to "enter the customs", Heng Yuan Xiang will analyze and screen those who apply to join the consortium, and those eligible and qualified manufacturers must pay a certain amount of performance bond in advance when they join the consortium. For example, to join the factory, we must pay 1 million yuan for the performance bond at the first time. "In fact, a portion of the factory's margin has been deducted, and the group will urge the factories to make up the corresponding amount in time and keep the margin limit of 1 million yuan," said Zhang Xin, chief operating officer of Heng Yuan Xiang group. Second, we must strictly control the process and put management in the usual routine business activities. In the office of Zhang Xin, chief operating officer of the Heng Yuan Xiang group, the reporter saw the records of control and control work of Heng Yuan Xiang Co, "joining the factory process management Yearbook" in 2007, which was divided into two volumes, two volumes and 3000 pages. From the application and approval of the factory to be joined, to the operation and management of the franchise plant, including quality management regulations, quality responsibility system, company operation accident types and qualitative analysis, regulations on crisis handling, factory grading, customer service complaint handling, Heng Yuan Xiang (Group) company has strict system and effective measures, so as to ensure the healthy, orderly and efficient operation of the whole consortium. Third, the "exit" strategy was established. Heng Yuan Xiang set up the exit mechanism of the consortium and eliminated partners every year. Lv Qing, director of the marketing center of Heng Yuan Xiang group, told the reporter that the three types of "intentional, unintentional and malicious" were identified in the group. If the affiliate was a malicious bad behavior, the group would launch a "one vote veto" mechanism to terminate the partnership as soon as possible. If it is not malicious, the group will issue a "warning" and "pre elimination" notice. In recent years, the partners who have been eliminated by Heng Yuan Xiang are not mainly those who break the contract or violate the rules, but are not qualified manufacturers. "From 2006 to 2008, Heng Yuan Xiang eliminated altogether 25 factories," Zhang Xin said. Because more manufacturers wanted to join Heng Yuan Xiang's "Consortium", Heng Yuan Xiang also took in fresh blood while eliminating factories that failed to meet the standards. "In 2007 alone, there were 16 factories and 13 new factories joined by Heng Yuan Xiang." "For the control of more than 9000 sales outlets in the lower reaches, Heng Yuan Xiang adopts" matrix management ". Lu Qing, director of the marketing center of Heng Yuan Xiang group, explained to the correspondents that any sales outlets should accept "double leadership". First of all, they must accept the management of Heng Yuan Xiang group, subsidiaries and Specialized Committee, and accept the management of their respective provincial branches. According to the survey, Heng Yuan Xiang has set up a consortium in 23 provinces across the country, which is responsible for the market management and coordination of the provinces and the relative "regional autonomy". Heng Yuan Xiang raised the threshold of the consortium, and put forward higher cooperation requirements and performance standards for the upstream and downstream enterprises in the joint venture, such as the annual quality month activities, such as increasing the strength of the survival of the fittest, and so on. After returning to Beijing, this reporter added to Lu Qing, director of the market center of Heng Yuan Xiang group, that "the proportion of the last knock-out system of the dealer is usually around 5%, and the proportion is raised to 10% in 2009." Why do manufacturers of "eight parties return"? Why do they have to obey the Heng Yuan Xiang group? Why do they follow the brand of Heng Yuan Xiang? Why should the more than 100 upstream factories and downstream businesses? This is to start with the development of Heng Yuan Xiang's "Consortium". Until today, Liu Ruiqi, chairman of Heng Yuan Xiang, clearly remembered that he inspected the first date of the first factory joined Wuxi Heng Yuan Xiang company in January 8, 1991. By the end of 1997, Heng Yuan Xiang joined the alliance.