After acquiring Smith field, a pork processor, Shuanghui group decided to launch the brand into the first tier cities in China from this year. However, only two months before it was introduced into the Chinese market, these high-end foods have also begun to be labeled with "buy one, get one free.". In many supermarkets in Beijing, Smithfield's American ham, bacon and other products have launched price reduction promotion activities. The industry believes that Smithfield's entry into the Chinese market adopts independent brand operation. In the initial stage of promotion, Shuanghui's "Smithfield plan" will also encounter difficulties.
Two month price reduction promotion
It is understood that Smithfield's products have officially entered the Beijing market since April this year. When introducing Smithfield, relevant staff of Shuanghui group once said that in the domestic high-end low-temperature meat products market, the well-known brands that can be remembered by the public have not yet appeared, which can be said to be a market gap, and the emergence of Smithfield can fill the gap. But the high-end products in the eyes of the staff have been neglected in the market.
In a Yonghui supermarket on Chaoyang North Road in Beijing, the second package of Smithfield products is sold at half price; Meilianmei supermarket displays the promotion label of "30 yuan less than 9 yuan"; The American bacon sold in Carrefour and Wal Mart Supermarkets is labeled as buy one get one free
Even with such promotion efforts, there are still very few consumers to buy Smithfield products“ I don't know about Smithfield products, and the price is very high. I seldom buy them. "“ Very few people buy it. It's too expensive. " This is what consumers and meat promoters say.
It is worth mentioning that most of the products on sale are approaching the shelf life. A certain Smithfield meat product with a 90 day shelf life participated in the promotion was produced on April 3, with less than 10 days left from the shelf life.
Positioning high-end ungrounded gas
For the root cause of Smithfield's price reduction and promotion, Zhu danpeng, a researcher at China Brand Research Institute, analyzed that: "all dealers have sales indicators. If the performance is not ideal, price adjustment is the direct way." Xu Xiongjun, a strategic positioning expert in the food and beverage industry, believes that one of the important reasons is that the product price is too expensive and not grounded. The deeper reason is that the supply is far greater than the demand due to the relative surplus of pork in the world. In addition, with the change of consumers' cognition of food safety and healthy eating habits, many consumers reduce their meat intake.
As Xu Xiongjun said, compared with the same category of products, Smithfield's pricing is higher than that of domestic brand products. For example, the price of 150 grams of Smithfield round American ham is 15 yuan, while that of other brands is only about 11 yuan. It is worth mentioning that although the price is high, the production cost of pork products in the United States is lower than that of domestic products. According to the data, in 2015, the average pig price in the United States was $1.12 per kilogram, while the price in China was about 15.2 yuan per kilogram, equivalent to $2.42. The price of pork in the United States was only half that of China.
As a result, industry insiders believe that Shuanghui marks Smithfield with a "high-end" label, which is intended to be a high profit margin“ If we import raw materials from low-cost countries, produce them domestically, and label them as high-end products, and sell them at a price higher than that of domestic products, we will naturally have higher profits. " Some industry insiders said that the high price deterred domestic consumers, so the sacrifice of profits or Smith field should first consider.
When introducing Smithfield products, Shuanghui group adopts the dual brand line, that is, Smithfield is an independent brand and does not take advantage of Shuanghui. This approach has advantages and disadvantages. The advantage is that it can make endorsement for Shuanghui brand, while the disadvantage is that Smithfield's brand building can not rely on the brand influence of Shuanghui, and the market recognition is still low.
Deep ploughing in the market and facing many challenges
The original intention of Shuanghui group to introduce Smithfield into the Chinese market is to improve the profitability of Shuanghui group through the operation of high-end brands. Therefore, it is worth paying attention to whether Smithfield's acclimatization will affect the profits of Shuanghui group in the early stage of entering the Chinese market.
As the income impact brought by brand awareness is probably only a small problem, as Smithfield continues to deepen the Chinese market, it may face more challenges in the Chinese market.
Industry insiders approve of Smithfield's single brand operation mode, but the independent operation of two brands does not simply mean the difference of brand names, but the independence of multiple links from production to sales. Zhu danpeng once believed that Smithfield should establish an independent and good operation system from the channel and brand degree, otherwise, relying only on Shuanghui sales channels and terminals would not be enough to support the operation of the brand. It is understood that in the supermarket channel in Beijing, Smithfield still relies on the original four dealers of Shuanghui.
Zhu danpeng pointed out that the purpose of Shuanghui group's introduction of Smithfield into the Chinese market is to establish a pyramid of high-end products and to cover more economically developed regions such as East China and South China through high-end products. However, the regions with high recognition of Shuanghui brand are mainly in Henan, Shandong and Hebei in the north, but the consumption level of these places is relatively limited, which is not enough to support high-end brands like Smithfield. This requires Shuanghui group to establish independent channels and effectively connect with the market according to the different positioning of Smithfield products and Shuanghui products in the future operation.