WEEK10 Group Discussion--Group5
Group Member
ZHANG Han; WANG Andi; LI Yuwei; YE Yijia; XIANG Lushan; CHEN Yijie
Luckin Coffee's collaboration with Moutai
Luckin Coffee's first collaboration with Kweichow Moutai was officially launched on September 4, 2023, with the product named "Sauce Aroma Latte."It was priced at RMB 38 for a single cup and RMB 19 after coupons. The "Sauce Aroma Latte" contains 53-degree Kweichow Moutai in each cup, with an alcohol content of less than 0.5%vol. The main ingredients are thick milk with baijiu flavor and coffee liquid.
This co-branding had a short warm-up period and the overall sound volume was smooth. After the official launch, the sound volume detonated rapidly, with the peak sound volume reaching 100 times the average value of the preheater hour. The second day of the product on line, according to the U.S. stock pink sheet market, on September 5 Luckin's share price continued to go up, as of the close of the day, Luckin's share price reported 33.60 U.S. dollars, up 5.07%, with a total market value of more than 9 billion U.S. dollars. Moutai shares on the afternoon of September 4, Moutai shares shocked upward, the highest increase of 1.5%, as of the close of the day rose more than 0.81%, the market value rose about 20 billion.
This is undoubtedly a phenomenal commercial success co-branding.
Why success
The value proposition of Moutai is combined with personal identity and qualified liquor, and its target customers are middle-aged people who need Moutai for business services. Moutai was a mysterious symbol in the young generation due to its scarcity, high price, and liquor taste. Meanwhile, Luckin's value proposition is cheap and accessible coffee and pop-culture style. It is a trendy brand among Gen Z and very wide-spread giving credit to its affordable price. The cross-over of these two brands gave both customer groups a chance to understand the unique culture and beverage of each other. Gen Z would love to try the new coffee product to get a taste of Moutai, the mysterious yet iconic liquor that could represent some parts of Chinese culture. Meanwhile, middle-aged users could also access Westernized coffee and its related culture. User's curiosity will drive them to consume this new cross-over product and take a glimpse into a popular field that was once alien to them.
Besides, both brands are at the top tier in their market. Moutai was one of the most superior brands in the Chinese liquor market, and Luckin is also a very competitive brand in the coffee market. Their fame and brand equity empowered this cross-over with a strong kick-start foundation, making this product a naturally well-known topic.
In addition, Moutai and Luckin could be regarded as representatives of different groups of users. Moutai is the symbol of Chinese dining-table culture, an "outdated" culture that is the opposite of Luckin: whose users are formed by young generations who are tired of traditional conservative culture and seek new fashion and pop culture. The sharp contrast between the two brands and the user groups they represent endows this new product with a very controversial and interesting identity: an exotic product that combines Chinese liquor and Western coffee in an unexpected way that not only attracts the young generation but also reaches out to middle-aged users of Moutai. Such an identity that consists of a pair of dichotomy cultures makes a big hit on social media platforms. The topicality of this new product has made it the hottest topic for a while. People spontaneously create content related to the new product and spread and share it. The collision between two different groups, namely the young and the middle-aged, as well as between two different aesthetics and cultures, has made this new product an extremely successful collaboration. Many people come to buy this new product out of admiration, with a curious mind wanting to know what the taste would be like when coffee and Moutai are mixed. Regardless of the actual taste, Luckin Coffee and Moutai have undoubtedly achieved their goals.
Improvement
1.Cultural Story and Brand Essence
Improvement: Integrate the brand stories behind Moutai and coffee culture into promotions, such as through short films, social media content, or offline events, allowing consumers to gain a deeper understanding of the collision between the soy sauce-like aroma and coffee culture.
Significance: Promoting brand essence can strengthen consumer identification, deepen the cultural significance of brand collaborations, and increase emotional connections.
2. Limited Edition Marketing and Scarcity Strategy
Improvement: Consider launching a limited-edition soy sauce latte with collectible Moutai-style packaging to create a sense of scarcity. Additionally, release seasonal or holiday-exclusive versions to attract collectors and first-time buyers.
Significance: A scarcity strategy can stimulate purchase desire, foster a "buy first, act fast" market psychology, and boost both sales and brand visibility.
3. Cross-Industry Experience
Improvement: Collaborate with high-end dining venues, cultural and creative spaces, or bars to create offline cross-industry experience scenes, such as "Soy Sauce Latte Tasting Events" or coffee-alcohol fusion-themed exhibitions, enriching the experiential value of the brand collaboration.
Significance: Cross-industry marketing provides immersive experiences, encouraging social sharing and enhancing brand interactivity and communication impact.
4. Audience Segmentation and Precision Marketing
Improvement: Implement targeted marketing strategies for different user groups, such as promoting trendy and fun creative ads to younger consumers, while delivering culturally rich content to traditional Moutai audiences.
Significance: Audience segmentation and targeted communication improve marketing efficiency and effectiveness, achieving precise coverage across diverse consumer groups.
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