What are the reasons for Huafeng’s business failure?

When it comes to Huafeng brand instant noodles

, I believe many people are familiar with it. Zhuhai Huafeng Food Co., Ltd. (hereinafter referred to as Huafeng), founded in the early 1980s, was once the largest instant noodle manufacturer in China. Its Huafeng brand Sanxian Yi noodles were popular across the country in the 1980s and were popular among Master Kong and Tongyi. Before entering the mainland market, it had always dominated the Chinese instant noodles market. In the early 1990s, Indonesia's Sinar Mas Group purchased a majority stake in Huafeng and became Huafeng's new owner. With the capital injection from Jinguang Group, Huafeng has successively opened more than ten production plants across the country, and successively launched Huafeng 2000, Dry Mix Yizu, Huafeng Noodle House, Palm Crisp and other series of products. In terms of marketing, Huafeng has also made a large-scale investment, establishing dozens of sales branches across the country, hiring famous artists to shoot commercials, and cooperating with Sina.com to launch online interactive advertising for the first time.

However, Sinar Mas Group’s acquisition of Huafeng did not develop in a good direction. As the new owner, in order to better manage Huafeng, Sinar Mas Group replaced a large number of Huafeng's senior staff, and then spared no expense to recruit various senior market operation personnel from Hong Kong and Taiwan to enrich Huafeng. It is a pity that these market operators are only familiar with the local market environment and operating methods, but have little understanding of the complex mainland market. However, they are unwilling to have an in-depth understanding and study of the market characteristics of the mainland. They think that in Hong Kong and Taiwan Having accumulated rich experience in market operations, facing the seemingly backward mainland market, they thought that the operation should be as familiar as pinching a snail with three fingers--stable.

After these Hong Kong and Taiwanese managers who were not familiar with the mainland market settled in Huafeng, they re-formulated market development, management and operation policies, quickly established numerous branches across the country, established independent dealers, and launched Direct sales. These practices complicate Huafeng's market strategy. On the surface, these practices are in line with modern marketing theories, such as in-depth distribution, refined operations, shortened channels, etc., but in fact they are seriously out of touch with the mainland market, especially the huge role of dealers is ignored. Abandoning dealers prematurely, Huafeng couldn't wait to launch direct sales when the time was not yet ripe. The large number of new employees recruited urgently could not ensure the quality of work at all. At the same time, Tingyi and Uni-President launched a powerful offensive on the mainland market. On the basis of being well familiar with the mainland market, they strengthened the role of dealers, gave full play to the role of local employees, strengthened the step-by-step market promotion strategy, and gradually occupied the market share in Vietnam. gain more market share. Since the mid-1990s, Huafeng's market share has shrunk severely, sales expenses have remained high, and profits have dropped significantly. By the late 1990s, Huafeng began to suffer losses and has not yet recovered.

Basicism leads to a mismatch in Huafeng’s marketing model

■Channel orientation, not product orientation

In the fast-moving consumer goods market in mainland China, it is still the Channel orientation is the main focus and product orientation is the supplement. For manufacturers, having a good sales network is much better than just having good products. However, Huafeng's senior managers stuck to their original thinking habits and believed that as long as they had good products, they would not worry about opening up the market, instead of examining the capabilities and quality of their existing sales network. In fact, Huafeng's sales channels have severely shrunk, and are basically concentrated in second- and third-tier cities and even rural markets, and are simply unable to undertake the sales task of high-end products.

■Failure to consider the interests of business personnel

This is the main reason why many companies fail when promoting new products. In other words, in the entire new product launch plan, the benefits of front-line employees in the new product promotion process were not considered. Instead, it was simply handed over to front-line business personnel as work tasks. There was no separate establishment for the promotion of new products. Bonuses drive the enthusiasm of front-line business staff to promote new products with profits. Business staff naturally have little interest in the sales of new products. In addition, new product promotion activities are very laborious, so front-line business staff naturally do not do much in promoting new products. .

■Have not considered the market operation habits of business personnel

Huafeng has been mainly selling low-end products before. The business personnel are already familiar with the operation mode of such low-end products. They adopt The terminal promotion method is to offer special prices, and the channel promotion method is to increase the proportion of gifts (for example, from selling 100 boxes to get 3 boxes to selling 100 boxes to get 5 boxes). High-end products are different from low-end products. Low-end products can be promoted and sold through price. However, high-end products are basically immature products when they are first launched on the market and cannot form a price scale. Simply making a fuss about price is useless. Huafeng should do more work in offline promotion of products and brand publicity, spend a certain amount of time, and gradually root the product concept and brand image of Tianxiang Huiju series of instant noodles in the hearts of customers and consumers. On this basis, Talent involves price drivers. Since Huafeng's sales staff are accustomed to price promotion methods, they cannot see the difference between the promotion methods of high-end products and low-end products. Therefore, soon after the new products are launched, they begin to apply for special sales in an attempt to promote channels.

■Wrong use of the full-market and full-channel strategy

Whether it is internal employees or external dealers and terminals, everyone generally has doubts about whether new products will be welcomed by the market. Not very confident. At this time, if there is a model market that can positively prove the vitality of the new product, it will help build the confidence of internal employees and external customers. Moreover, traditional channels and KA stores have different attitudes towards the introduction of new products. Cleverly utilizing the subtle relationship between traditional channels and KA stores can greatly promote the acceptance of traditional channels and reduce the difficulty of entering KA stores. However, Huafeng's senior management did not consider this much at all. Once a new product was launched, it was required to carry out full-line promotion in all markets across the country in an omni-channel manner. In the end, full-line promotion turned into full-line returns.

■Brand awareness is too low

Sometimes consumers’ awareness of the brand is not consistent with the company’s brand design. Huafeng's senior managers believe that high-end products will definitely enhance the brand image. In fact, it is not that simple. Consumers have positioned Huafeng as a declining, low-end brand. It is naturally difficult for consumers to accept a so-called new high-end product suddenly popping up under this old brand. This is like a company that has been producing agricultural tractors. The factory suddenly starts producing sports cars. Will consumers accept the sports cars it produces? The answer is no.