Six

Peter Drucker said that it is the customer who determines what a business is rather than by the name nor the regulations. The ultimate battlefield for competition in business is nothing else but the customer's mind. Starting from outside in, from the customers’ perception, is the key to achieve disruptive innovation. Furthermore, the key to understand customer’s perception is to unveil existing perceptions. Then we can leverage those existing perceptions to achieve results with minimal efforts. If we try to create some new perceptions against existing ones, which is like rowing against the tide. Consequently, the likelihood of success is low. Why is traditional innovation so difficult to succeed? Because the starting point for innovation for most businesses, especially large ones, is often internal technique changes rather than external customer needs. The so-called expert’ point of view is exactly the biggest obstacle to innovation.

We define the probe into customer’s mind and perception as “positioning”.

Although range hood is imported from the Europe, the best-selling brand in China is not the European brand Siemens but a local Chinese brand. In 2011, Fotile communicated its brand positioning as “China's leading and premium kitchen appliance expert”, emphasizing that it was more professional and understood the Chinese kitchen better than foreign brands, thus leaving Siemens behind with a bigger and bigger gap and putting huge pressure on its main local competitor Robam. In response to Fotile's attack, Robam launched a massive campaign in 2012 with the communication theme “Rice Cooked with Love – Brining more Happiness to Families around the World”. Unfortunately, it was poorly received despite of enormous financial investment.A nationwide consumer survey unveiled the fact that “strong suction” was the most important driver when customer choosing range hood. Many companies have already rolled out high-air-flow range hood. But almost all of them just take it as a standalone range among their extensive product portfolio at the tactical level. No company has taken it seriously at strategic level. In 2013, we advised Robam to strategically announce the cessation of production of low-air-flow range hood and focus on strong suction product innovations. The first generation of strong suction range hood was launched in the same year. Building upon its high-air-flow range hood, Robam redefined the strong suction range hood by announcing four industry-leading major parameters, namely aggregating suction, strong filtration, rapid ventilation and energy saving. Robam also achieved a round of technology breakthroughs, which helped to raise the bar for competitors. In terms of communication, Robam focused on strong suction with the objective of building the perception of Robam standing for strong suction range hood.Robam’s innovative products perfectly match the customers’ demand. Robam’s strong suction range hood was so well received with significant sales increase, as it caters to customer’s requirements. Major competitors, such as Siemens and Midea, also followed suit. At the end of 2011, there were only 35 manufacturers producing high-air- flow range hood, which accounted for 16% of the total range hood market. After Robam’s success of strong suction range hood, by the end of 2013, there were 69 manufacturers producing and promoting strong suction range hood, which accounted for 27% of the total range hood market. Very soon by 2016, the strong suction range hood segment contributed to 51.02% of the market, becoming the mainstream segment.

Robam’s innovative products perfectly match the customers’ demand. Robam’s strong suction range hood was so well received with significant sales increase, as it caters to customer’s requirements. Major competitors, such as Siemens and Midea, also followed suit. At the end of 2011, there were only 35 manufacturers producing high-airflow range hood, which accounted for 16% of the total range hood market. After Robam’s success of strong suction range hood, by the end of 2013, there were 69 manufacturers producing and promoting strong suction range hood, which accounted for 27% of the total range hood market. Very soon by 2016, the strong suction range hood segment contributed to 51.02% of the market, becoming the mainstream segment.