Kappa Brand Is Not Old "Secret Recipe"

A company collapsing under the pressure of domestic and foreign giants such as Nike, Adidas, Lining and so on, with the help of sports and entertainment, has built a bridge leading to the blue ocean between sports and fashion, so that it has been regenerated and developed at a high speed. Its sales volume was only about 10000000 in 2002 and 1 billion yuan in 2006.

The rapid growth in the new blue sea market has made the fast company from China attract the attention of Morgan Stanley, the global capital alligator, and quickly get the financial investment of the big mama.

Olympic sports marketing, super girl detonating entertainment marketing.

Relying on sports, entertainment and fashion, Pepsi has been a hundred years old. KAPPA has found the third line, which is different from Nike, Adidas and Lining, the fashion line of sports products.

The same is the sports marketing, the world's Top Swimwear brand SPEEDO because too much emphasis on professional sports marketing, rather than three-dimensional communication with ordinary consumers to create brand, because only rely on the general agent and not personally cultivate the Chinese market, coupled with the channel system change to remove the inconvenience caused to consumers, leading to its top brand energy, far from being deserved in China.

Case Kappa: the stylish survival of professional sports brands. This company is called Beijing trend sporting goods company. It is founded and steered by Li Ning Co's former CEO Chen Yihong. It mainly manages Italy's high-end sports brand Kappa and so on.

So how did this company fall to the brink of collapse and how did it happen again?

Predicament: born and powerful, it is on the brink of collapse. Beijing sporting goods Co., Ltd. was founded in April 2002 by the first sports brand Li Ning Co of China. It belongs to the Lining group enterprise and is appointed by the Li Ning Co CEO Chen Yihong.

At the beginning of its establishment, Beijing is the sole agent of Italy's famous sports brand Kappa in mainland China and Macao. The main brand of Kappa is clothing, shoes and sports equipment. The agency period is 5 years.

At that time, Lining group's strategy was to develop independent brands and cooperate with international brands.

Kappa, a famous Italy sports brand, operated by the first Lining group in China, should have run smoothly and business is soaring.

However, when Kappa first came to China, he encountered three difficult problems: product positioning is not allowed: in 2002 and 2003, the Beijing movement mainly introduced Kappa professional sports products.

However, it soon found itself trapped in the "Red Sea": Kappa is positioned in the high-end "professional sports brand", which means that it is easy to imagine the competition with top professional sports brands such as Nike and Adidas.

Acclimatized: because of the trust in Italy's advanced design philosophy, Kappa came to China at the beginning of the year, and brought its clothing, shoes and other products to China.

What I did not expect is that the European style sports clothes without proper Chinese elements are not recognized by Chinese consumers.

The lack of long-term development mode: only 5 years of authorized contracts, if Italy is due to recover the brand agent right now, then it will be useless and help the opponent to do the wedding dress.

The three predicament led to a very confused trend in Beijing.

Sales in 2002 were only about 10000000, and sales in 2003 were about 48000000.

Tens of millions of sales are simply unable to maintain the channel cost of Beijing's more than 200 stores.

"At that time, cash flow was very intense. Once there was a slight stir, customers would run away."

Trend CEO Qin Dazhong recalls the thrilling days, still lingering fear.

Blue Ocean: no confrontation with its opponents. In June 2004, Lining group successfully listed on the Hongkong stock exchange.

Lining group, which failed to see the long-term value of Kappa and Beijing's trend, issued a notice in July 2005, pferring Beijing's controlling share to Chairman Chen Yihong.

Where are the trends going?

Before formally divest from Lining group, Chen Yihong and other company leaders repeatedly asked themselves.

Do you have the advantage of taking traditional professional sporting goods route and its agent Kappa?

In 2004, at the Kappa global conference held in Australia, Chen Yihong saw another product line of Kappa -- fashion product line.

Chen Yihong suddenly realized that after the failure of Kappa operation in China, the problem was that he was fighting against his opponent positively on professional sports routes, and the products lacked differentiation.

We should weaken the color of sports, increase the connotation of fashion, open up the blue ocean between the gap between sports and fashion, and take the "sports fashion route".

This is the "third way" that Beijing has developed through painful market suffering.

Transformation: to develop research and innovation in the bar, in order to change the direction of remodeling the company's innovative culture, Beijing trend invited many sports fashion designers to describe the product direction to managers and brainwash them.

For a while, the company stipulated that meetings should not be allowed during the day, until the meeting was moved to the bar and KTV in the evening, so that the company employees could put on fancy clothes and go to the bar to feel the fashion atmosphere there.

What impressed the trend managers was that they thought that some styles of clothes were not worn at all, but there were many people in bars.

At the same time, the design is no longer copying Italian style, but on the basis of Italy's advanced design style, it adds Chinese culture and local fashion elements, with an average of over three new rates per day, launching products suitable for Asian consumption characteristics.

In the storm of innovation, sales in Beijing rose to 260 million in 2005.

Brand: "sports entertainment, entertainment and sports". Some sporting goods companies imitate Nike and Adidas, invite sports stars at a high price, smash the prime time TV ads, sponsor the most popular events, but by the end of the year, they find that the cost of brand promotion is high and even the cost is not recovered.

The trend of Beijing is not to adopt the high cost and high risk promotion mode of TV commercials, but to make a difference in the aspect of brand differentiation.

Focusing on the brand connotation of "sports, fashion, sexy and taste", the promotion of Kappa brand under the trend of Beijing adopts the strategy of "blue ocean" promotion: making articles on the integration point of sports marketing and entertainment marketing, implementing the strategy of "sports entertainment, entertainment and sports", instead of taking the professional sports sponsorship route similar to Nike.

For example, in the 2006 World Cup, the Beijing movement sponsored Huang Gexuan, Huang Jianxiang, Jinggangshan and other fashion and sports groups with the right voice to watch the ball. They went to Germany to watch the ball, asked them to wear Kappa costumes, comment on football on TV, and discuss fashionable topics.

The costumes for the CCTV TV model competition.

Facing the upcoming 2008 Olympic Games, the movement sponsors "Olympic helmsman selection" competition.

Olympic helmsman selection combines sports and entertainment, combines athletics and leisure sports, and combines civilians with top Olympic events.

In addition, Kappa's sponsorship of China's 49 class sailing team embodies the unique brand strategy - Sport and fashion.

With the help of sports and entertainment marketing, Kappa sales in 2006 broke through 1 billion yuan, and more than 1400 stores in the country became a big black horse in the sports industry.

In 2006, Beijing moved 20% shares to Morgan Stanley for financial investment.

At the same time, there is a change in the international market which is conducive to the trend group. The parent company of Kappa and the BASIC NET group of Italy listed companies are in urgent need of cash, so they take the opportunity to buy the brand ownership and permanent franchise of Kappa in mainland China and Macao, and solve the risk that the agency period is too short.

Challenge: can "fast company" become a "stable company"?

From 260 million in 2005 to 1 billion in 2006, sales in Beijing doubled nearly four times in a year, and the number of personnel doubled.

As a fast-growing fast growing company, the scale of rapid expansion, from the perspective of internal management process, there will be three difficult problems: first, the management span will become larger, the management level will be deepened, and the management structure will become more complicated; two, the talent reserves, especially the top and middle level talents are seriously inadequate; three, the rapid expansion of personnel and the increasingly complex components will inevitably lead to various cultures and values.

Specifically, to the clothing industry, from the specific management results, there is a biggest problem: we need to accurately predict the market demand, keep up with the market trend, overcome the backlog or break the goods in the rush season, and realize the quick payment recovery.

In order to consolidate the whole enterprise management system, Beijing has launched 4 prescriptions: first, strengthening the management team building; from the chairman Chen Yihong, CEO Qin Dazhong to the four directors of marketing, production, international, shoes design, etc., all of them are paying tuition fees to the first-class universities such as people's University, Peking University, Changjiang business school and so on. The two is to promote the information construction related to the enterprise's market response speed and the safety of stock funds, and introduce the ERP system of SAP; three, to introduce international financial investor Morgan Stanley to prepare for future listing and more M & A; four, to strengthen the financial system construction, and introduce third independent audit institutions to monitor the financial health of the enterprises in CEO.

In China, it is difficult for an enterprise to create a blue ocean, but it is more difficult to establish a sustainable competitive advantage in the blue ocean.

Can Beijing's four moves to tackle challenges become a "stable company" from "fast companies"?

Let's wait and see.