Master Kang, who once swept the world with "a bucket" of instant noodles, is now at its peak and is in decline.
From zero to the peak, Master Kong founder Wei Yingzhou spent 20 years to make Master Kong the world's largest instant noodle company.
From the peak to the beginning of decline, Master Kong only took five years, and in 2011, Master Kong's market value reached the peak of 140 billion Hong Kong dollars.
However, in 2016, the total market value of Master Kong Holdings was only about 52.85 billion Hong Kong dollars, which means that in five years, Master Kong's market value evaporated by 90 billion.
A generation of fast food product giants, why did Master Kong's instant noodles turn from prosperity to decline and fall from the peak?
Many people know Master Kong but do not know that it is a Dingxin Group, Master Kong is just a major brand of the group, in 1992, by the Wei brothers in Tianjin jointly founded.
After the establishment of Master Kong Food Company, with a package of braised beef noodles for 1.98 yuan, it opened the market on the train, and it quickly became popular all over the country because it was portable and edible at any time.
At that time, there were no similar fast food products in the Chinese market, and Master Kong's braised beef noodles were at their peak, and they were listed in Hong Kong in only four years.
Twenty years ago, Master Kong almost became synonymous with instant noodles, with a daily output of 25 million packs and annual sales of 6 billion packs. At its peak, the company's market capitalization exceeded HK$140 billion.
Master Kang, who had ascended to the altar, did not continue his path to becoming a god as expected, but instead played a good hand of cards.
Food safety is the bottom line of enterprise production, and once touched, it will inevitably suffer crazy reaction.
Since the outbreak of the case of Dingxin's Justice Company in 2014 of shoddy and mixed with feed oil to fill food with oil, consumers have spontaneously launched a "top-killing action" to strongly resist Master Kong's products.
Although companies have tried their best to remedy it, the crisis of trust has been formed, and the brand image has plummeted.
Subsequently, Master Kong issued an announcement saying that inferior lard was only used in Taiwan and that the mainland region was not affected.
As soon as this move came out, Master Kong basically bid farewell to the Taiwan market, and the people's indignation in Taiwan became more intense. As the direct victim of the black heart oil incident, Master Kong Company was difficult to gain a foothold and was dissolved in 2017.
The mainland region of China no longer trusts Master Kong's instant noodles, and its image of endangering health has long been deeply rooted in the hearts of consumers, laying the foundation for the development of future enterprises.
Brand and word of mouth is the cornerstone of the survival and development of enterprises, inferior lard incident one damaged the brand image; the other directly affected the word of mouth, so that Master Kong's image in the eyes of consumers plummeted, and it is difficult to recover, it is really not worth the loss.
In the final analysis, companies should not only look at the immediate interests, but also consider the long-term development.
With the development of the economic level, China's market has entered the era of fast sales, while Master Kong still maintains a single product type and lacks innovation.
The emergence of the same type of alternative products has caused Master Kong's market share to be lost in large quantities.
At the same time, through continuous innovation and research and development, competitors have launched a series of irreplaceable products in the short term, master Kong has become brilliant no longer, and the product strength is not enough to compete with it.
Subsequently, the takeaway business entered the market, and under the expansion of capital, the takeaway business gradually became active to seize the market, and the takeaway met the needs of consumers for a variety of tastes with its diversification and relative health;
Chain convenience stores sell bento or fast food that can be eaten with a little heating; the fast food market is diversified, such as self-heating hot pot, self-heating rice, and so on. In just a few short years, instant noodles have become a staple on the fast-food table.
Coupled with the impact of the inferior lard incident in Taiwan, instant noodles have always been difficult to tear off the label of "unhealthy food", and instant noodles have been unable to meet people's pursuit of health and nutrition.
Instant noodles were first achieved by train, and it is said that the founder of Master Kong accidentally discovered the instant noodle market when he took the train to go home from business, and thus began the entrepreneurial road of instant noodles.
Nowadays, China's high-speed rail gradually covers the whole country, and the dining car service is becoming more and more perfect, and instant noodles are difficult to climb the elegant hall.
After being squeezed by various sales channels, the category attribute of instant noodles has to degenerate from mainstream food to marginal supplementary food.
Master Kong is facing the "contradiction between the people's growing needs for a better life and unbalanced development."
The competition in the market is fierce, Master Kong only relies on a bowl of braised beef noodles to pass through the market, innovation is insufficient, waiting for it can only be the market share continues to decline.
Market trend is the key to the success of enterprises, only by drilling deep into the market development trend, understanding the real needs of consumers, and developing products on this basis, catering to market demand to innovate, in order to truly rejuvenate the vitality of enterprises.
As the people's consumption level changes, Master Kong's main market advantage of 3 yuan has decreased sharply, and the high-end market dominated by brands such as "Ramen Say" is widely sought after for innovation and integration of trend elements, while Master Kong does not have the same positioning of products to compete with it, so he misses the high-end market.
Although in terms of marketing, Master Kong tried to grasp young consumers by asking celebrities to endorse and advertising in popular dramas, there was no surprising product that could gain a foothold in the market.
What was once a luxury cuisine is not very high-end in the instant noodle market, which is now full of imported products.
Under the general trend of consumption upgrading and consumer goods rejuvenation, if big brands do not keep up with the situation and extend, then enterprises are equivalent to passive "sinking".
In 2015, Master Kong followed the healthy trend of consumption upgrading, tried to turn to the high-end market, and launched a series of high-end new products.
"Treasure materials" and soup master equivalent price in 5-6 yuan, the previous launch of the "love fresh meal" pricing is also about 6 yuan a barrel, and bagged black and white pepper noodles priced at 2.6 yuan, continuous new product launch, and finally reversed the downward trend in performance.
In this way, product upgrades are the trend of the times.
Product upgrades can save the downturn, but they don't solve the underlying problems. Although Master Kong constantly tries to cater to market demand, market share is not determined by enterprises, but by consumers.
Master Kong has long ceased to be a leading enterprise of instant noodles that occupies 50% of the market, and the lost market share wants to win back, relying on simple product upgrades.
At present, Master Kong is facing the sinking of product brands, under the premise of a better choice, consumers are not willing to pay for the "low-end products" in their own eyes, and the only way today is to enhance the brand image, realize the transformation and upgrading of the enterprise as a whole, and change the inherent impression of "unhealthy food".
The peak has fallen into fact, can it return to the peak and win the "heart" of consumers again? What Master Kong needs is not only a simple product upgrade; regaining the brand and reputation, delving into the market, and making every effort to innovate is the only way to stop the loss in time.
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Author: Xiang Nan