Reeb, Shanghai's home-grown beer brand, which was launched at a time when Shanghai's products enjoyed nationwide renown, stands almost alone as a reminder of the past in a city which is undergoing tumultuous change.
The seemingly insatiable appetite for foreign brands that has characterised Shanghai's dramatic renaissance over the past 15 years signalled the end for many local products, but not for Reeb, which retains a relatively strong market share.
Shanghai's local tipple, however, has been deposed as the city's favourite beer by Japan's Suntory. The Japanese beer secured market leadership just four years after launch, with adroit marketing to establish itself as a drink for Shanghai's younger generation, the energetic urbanites at the vanguard of the city's transformation. As a result, Reeb appears old-fashioned and unhip. Suntory's lighter taste, in marked contrast to Reeb's rounder flavour, also played well in a market where beer is often drunk with food at restaurants.
Reeb, still the city's second best-selling beer and with no serious rivals nipping at its heels, set its sights firmly on recapturing its crown, staking its future on its links with the past. This strategy, capitalising on Shanghai's civic pride, has had its successes, particularly in its 'I Love Shanghai' TVC. This Bates-developed ad soon became known for an unashamedly rousing song that proved a citywide hit in Shanghai's bars and karaoke parlours. The beer's owner, Asia Pacific Brewery, has also introduced a new, less robust variant, Reeb Superlite, which has managed to reclaim ground in restaurants.
However, despite these advances, Reeb is still a long way from the number one spot, with an estimated market share half that of Suntory's. For a mass-market beer, volume is key and Reeb hasn't succeeded in mounting a sustained challenge strong enough to make substantial inroads into its rival's strongholds.
Although the heritage card looks like the right one to play, the rapid changes sweeping through Shanghai mean the strategy could backfire if Reeb's marketers aren't careful. 'Made in Shanghai' may have lost its cachet and Reeb must tread carefully, lest 'Brewed in Shanghai' suffers the same fate.
DIAGNOSIS
ADDISON JAMES, Managing director, Lowe China
What happens when the onslaught is coming on all sides, including from within? Reeb has lost home-court advantage in distribution, been forced to share its Chinese beer turf with Tsingtao, and missed the boat in product terms when Suntory swept the market with a populist, light-tasting beer.
In conjunction, the internal discussions on portfolio management with its APB Heineken/Tiger colleagues must make for some pretty interesting family drama.
Freefall happens. The group of Reeb diehards has got older and smaller, and promotions like the 'Win a Nokia' campaign eroded margins without strengthening brand allegiance. Curved re-growth should have been a clear objective, not a series of volume-share spikes. The global beer market is littered with dead or dying brand leaders that have shied away from long-term strategy in favour of short-term promotions - a factor of another global marketing phenomenon, whereby brand managers and agencies keep being changed, each new team panicking into delivering immediate sales results.
Success, albeit brief, came with the Bates' 'Shanghai Pride' campaign.
Jiang Ze Ming's freeing of economic restrictions led to the Shanghai miracle of today, and the Bates campaign reflected this perfectly. Then lost its way. Surely there was more in that beer position to be tapped.
GE YUN, Business director, Y&R Shanghai
It is a difficult task to sustain a local brand in a market that is fast becoming too Westernised, with aspirations to be a serious contender to New York, London and Paris. Apart from Reeb beer, where are other flourishing Shanghai brands today?
Reeb's uniqueness is in its Shanghai heritage, and the brand has been positioned on this for years. However, Y&R's Brand Asset Valuator shows a gap between the image of the beer brand and that of the city. The Shanghai brand is as strong and healthy as brand leaders like Nike and Coke. The city is characterised by attributes such as 'courageous', 'stylish', 'distinctive' and 'up-to-date'. Reeb is completely dwarfed in these image attributes.
As a Shanghainese, I am proud of the city, but I wouldn't care to drink Reeb when socialising with friends. The brand's quality and image perception is low. Qualitative research also shows that Reeb's target user tends to be older and blue-collar, which is very dangerous in an upwardly-mobile city.
The current 'Reasons why I like Shanghai' campaign is too safe. There lacks a deeper interpretation of the Shanghai spirit, which is about ambition and the desire to impress the world. The advertising challenge is to inject the attitude, the momentum, the style of the city into the beer brand.
TREATMENT
James' prescription
- First, a clear decision on portfolio management must be made among the Shanghai Asia Pacific Brewery stable.
- There should be an embracing of the reality of long-term objectives for the brand versus short-termism, and an ensuing long-term client/agency partnership.
- Re-work and return to what 'Shanghai pride' could mean, and leverage it with an integrated, but focused, campaign. Don't just rely on television.
Ge's remedy
- Be bold with expressions of the Shanghai spirit in the brand communication.
- Redo the product packaging. Reeb used to belong to the European school of beer packaging design, but the current design falls into nowhere.
And it looks cheap and out of date. Rework might add a little premiumness to uplift image.
- Use rational communication to build good product quality. Explore the winning of medals as support of the quality story.
