At the recent “Paths to Brand Growth in the Age of Neo Consumption” forum, a joint effort between Bain & Company and Focus Media, Joanna Lu, expert partner at Bain, Jeffery Lu, CEO of Mengniu, Phyllis Zhang, CEO of McDonald's China, Jiang Nanchun, founder of Focus Media, as well as a group of marketing leaders from leading local and foreign players, such as Unilever, Yum China, Genki Forest and Xiao Guan Cha, took a deep-dive into topics including “Paths to Brand Growth in the Age of Neo-Consumption.

China's consumer industry enjoyed a swift recovery in the first half of 2021, with both ‘incumbents’ and ‘insurgent companies reporting robust growth.

But the industry could still face challenges in the second half of the year, as local outbreaks of COVID-19 continue to pose threats to spending. Amid the backdrop of growing competition for existing resources, escalating price war and increasing traffic costs, how can brands maintain a strong momentum and their strategic focus while unleashing growth potentials in the age of neo-consumption?

Four growth paths and core battles for brands to win in the future

Joanna Lu is an expert partner at Bain, with expertise in consumer goods and marketing. She believes that we are entering the age of neo-consumption. Drastic shifts of consumer needs, consumer decision logic, as well as consumer relationship with brands  in the last few years have had a profound impact on the way brands grow and market themselves.

When people buy a product, they aren’t just buying the product itself, but also the lifestyle and emotional value represented by the product and brand. Amid the age of neo-consumption featuring fragmented content, commoditised competition and omni-channel integration, the B2C business model has been turned upside down into a C2B model.

“We are in the age of both excitement and anxiety,” said Lu. “For any given brand, no matter incumbent or insurgent, local or foreign, only when its CEO has identified the right growth model, its CMO has found the fittest marketing model, and its media strategy team has figured out an innovative way of advertising, can it build an ever-lasting competitive advantage. Amid the ever-changing market trends, Bain has identified four growth paths for brands. And they are the core battles for brands to win in the future as well.”

Star product: A bumpy ride for insurgents to grow into incumbents. Consider Genki Forest. With a high penetration in seed users, it quickly reached a broader consumer base via scaled marketing to become a well-recognised brand.

New occasions: Surface the hidden needs of core consumers. This includes activating unmet needs, triggering unconscious hidden needs to create new needs. Take Milkground for example. Elevator advertising helps to keep the brand top of mind. Additionally, it successfully created new needs for kid’s cheese sticks and new opportunities for cheese consumption.

Omni-channel: As online traffic starts to lose momentum, experiential shopping in offline and O2O channels are emerging. Channel 3.0 Era is here, with omni-channel in full swing.

Regional attack: Stay connected with the trend-setting population in the neo-consumption hubs. They are a brand’s most powerful consumers and its core regional battlefield.

Growth stories of leading brands:
Brand driven, occasion driven, and innovation driven

Jeffery Lu, CEO of Mengniu, shared the company’s story behind its high revenue growth. He owed Mengniu’s success to bold, consumer-centric breakthroughs. They are, breakthroughs in its product, Yoyi C, breakthroughs in the supply chain of its fresh milk business, Shiny Meadow, and breakthroughs in how its cheese brand, Milkground, is being consumed. He proudly pointed out that Mengniu’s secret formula for its new product success was to first, seize upon consumer's shift towards healthier eating, and second, leverage Focus Media to centralise media to maximise exposure. He suggested that brands should aim to differentiate rather than homogenise, fight a value war rather than a price war, drive growth for the  brand rather than simply traffic, and thrive amid uncertainty with a clear business idea.

Phyllis Zhang, CEO of McDonald's China, shared three growth strategies McDonald's has identified as it transformed its growth model from “scaling up” with new stores to “scope at scale”, with same-store sales growth fueled by B2C community needs. To address differentiated consumer needs, McDonald's China launched new products, such as Ciabatta Burger, to reach a wider range of consumers. To meet differentiated 'occasion needs', it tapped into occasions such as breakfast time, and engaged with consumers at key touch points along the consumer decision-making journey, such as home elevators. To serve differentiated channel needs, McDonald's China designed an omni-channel experience targeting different consumer touch points.

Focus Media upgrades its digital system to become a long-term growth partner of brands

In this age of 'growth anxiet'y, brands need media partners who understand both media and business, and who can make significant contribution to brand growth. Jiang Nanchun, founder of Focus Media, elaborated on how Focus Media, a centralised media platform reaching 400 million urban residents every day, can help brands grow and become their long-term partner with eight major solutions.

He said, “We develop effective media plans with advanced tools and provide full solutions to enable brands to follow their own growth paths. Drawing on our close collaboration with Alibaba-backed Umeng+ and other third-party monitoring institutions, we also provide E2E services, from location selection to performance motoring and review, through our digital supporting system. We are not only the backbone for scaled consumer engagement, but also the trigger of occasion-based transactions. We trigger transaction based on 'occasions' and help brands surface hidden needs and create new growth.”

Eight solutions to help brands grow

Focus Media reaches 400 million Chinese urban residents, 60% of China's middle-class population. It is a mainstream media company with wide coverage and high-frequency reach. Its abundant resources add more felicity into brand’s media strategy.

To quickly build awareness and sales enablers, brands can employ Focus Media’ nuclear saturation attack, which includes mainstream expansion, occasion-based brand refreshing, ecommerce enhancement and leading position defense.

They can also draw on Focus Media’ omni-channel E2E digital system, empowered by Alibaba, which consists of intensive TA exposure, specific occasion trigger, LBS store enhancement and key region targeted attack, to launch their targeted campaigns.

Occasion-based transaction trigger

Amid increasing competition for existing resources, brands need to leverage new ‘occasions’ to create new growth. Occasion-based creatives, defined by when, where, who and what, can reveal potential needs and desires, and boost sales.

Focus Media is an occasion-based media. Its indoor advertising, in both commercial and residential buildings, targets consumers when they are in the final step of their decision-making journey, and plays a major role triggering ecommerce transactions and transactions of life services within 3km. It serves as an occasion-based transaction trigger, connecting occasion-based creatives and transactions, and has helped many brands develop new occasions and achieve rapid growth.

Digital supporting system to ensure effective planning and fruitful results

After it has fully completed its  digital transformation in 2019, Focus Media has been committed to improving the way it digitally supports its clients.

Focus Media now provides clients with not only E2E marketing plans, but also a sound digital tracking and review system. It helps brands set media target aligned with their growth target and standard process for results prediction, determine market position and ignite growth. The company also offers E2E review, helping clients to optimise advertising strategies, facilitate data accumulation and accelerate conversion. A long-term growth partner of brands,  Focus Media incorporates E2E brand building, omni-channel marketing, and E2E asset accumulation to  provide more transparent and sophisticated solutions for brands.

High frequency reach and scope-at-scale advertising are critical in a fragmented media environment

Tan Beiping, a media industry expert, shared his insights on innovative media strategy in the era of neo-consumption. During a time of explosive information, he said the media environment has changed dramatically, and the consumer journey is increasingly fragmented and diversified.

Brands should evaluate their media strategy in four dimensions: reach, frequency, quality and results.

[]In terms of reach, social media advertising and elevator advertising are currently the two media with the highest daily reach rate. In terms of frequency, he suggested that the traditional 3+ reach theory born in the 1970s is now widely challenged in the new environment, especially when brands want to build new consumer perceptions, behaviors or habits, which requires the frequency above 10-15 times.

Fang Jun, vice president of data and digital development of Unilever, shared his research on media frequency. He believes that each category and product need a different frequency, and empirical data is required to justify the most effective method. Tan Beiping also believes neither the conventional massive marketing nor the current precision marketing biased towards personalisation is effective enough for large enterprises seeking further growth.

From his POV, they should adopt a scope-at-scale approach to media placement, and maximise consumer resonance engagement with precise technologies, occasions and content, while identifying the media that provides both scale and precision in advertising.

Finally, when measuring media effectiveness, you need to consider three things: brand building, sales growth and digital assets. These are future-facing ideas drawn from cutting-edge media practices. They are highly inspirational for both incumbent and insurgent brands when they rethink  their marketing strategies.

Zhao Jie, vice president of Minglamp Technology Group and president of Miaozhen Systems, is t  an independent third-party platform.

The company started collaborating with Focus Media on real-time monitoring of elevator media as early as 2018, replacing the manual monitoring of traditional outdoor advertising with digital monitoring, which will be accessible to all customers this year. MixReach, Miaozhen’s online and offline cross-media reach effectiveness and cross-media budget allocation tool  has captured the true effectiveness and efficiency of advertising through LBS big data and offline single-source research. Case studies show that Focus Media is an important channel in the media mix, allowing companies to improve effectiveness and optimise results, and is effective in helping brands achieve their MixReach goals. Under the same budgetary conditions, elevator advertising shows highest effectiveness for 1+Reach, and lower unit cost and higher efficiency for 3+Reach. For brands that want to reach target audiences at optimal times, , elevator advertising will help them  achieve the 10+ Reach goal with a limited budget, ultimately resulting in higher efficacy.

Lu Zhiguo, COO of Umeng+ under Alibaba Group, says that TGZT,  Umeng+’s marketing tool, is leveraging digital technologies to open up a new era era of data- and intelligence-driven outdoor advertising.

Umeng+ leverages the ‘data middle office’, with  Focus Media’ resources, in addition to the massive data system of Alibaba to help brands in precision location selection and estimate reach effectiveness before investing into ads with Focus Media.

It can also quickly provide a post-campaign analysis report on the effectiveness of reach to potential audiences and feed the profile of target customers exposed to offline ads back to Alibaba’s data bank.

This reveals how elevator advertising players help customers drive conversion and accumulate brand’s digital assets along every stage of brand’s AIPL journey. In addition to this, feeding the profile of target customers exposed to offline ads back online and re-advertising for expanded reach have facilitated performance synergy and overlay between Focus Media and Tmall, which contribute significantly to Focus Media’ upgrading.

Xiao Guan Cha CMO Mei Jiang shared how Xiao Guan Cha took over Focus Media smart screens with an one-hour-long ad, which successfully ‘freshen up’ the idea of tea rituals in the minds of  Chinese consumers and generated a staggering 550 million 'reads' on Weibo. Wang Pu, vice president of Genki Forest, said, “Investing in Focus Media’s elevator advertising greatly helped to improve brand power and sales, as evidenced by the post-campaign data.”

According to Chen Peng, vice president of Focus Media, Focus Media has a deep understanding of brands’ growth needs in the age of neo-consumption, and leverages targeted solutions and professional AIPL data system to support brands along four growth paths, helping them to accelerate their growth. 

Looking ahead to the next five years, brands and experts believe that the core elements of growth will remain unchanged despite the fragmented and fast-changing market. These elements include consumer-centric products, brand value creation, utilisation of centralised media, and deep expertise in core marketing channels. To succeed, brands need to better understand their goals and various tools at their disposal, so they could more effectively plan out their business strategies amid uncertainties.