Can price cuts bring Zhong Xuegao back to life?

But can the drama of price reduction and rebirth really save Zhong Xuegao? According to Li Jin, price cuts are not a cure-all for all ailments. Instead, they are the prelude to a new round of existential crisis.

輿情：

Feelings of being cheated and collapse of trust

Many bosses have the illusion that product price reductions are a benefit to consumers, and the public should readily accept them.

However, sometimes, the more the price is reduced, the more intense the market feedback will be.

Li Jin conducted a public opinion survey on Zhong Xuegao and found that in the core dimension of “price and value perception”, negative reviews accounted for as high as 93%.

This means that the focus of consumer disputes over Zhong Xue’s high prices has never been the sheer “expensiveness” of numbers, but that this ultra-high pricing has not been supported by a stable experience and sense of value.

In this context, when an ice cream that once sold for 66 yuan, and usually sells for more than ten or twenty yuan, suddenly changes its appearance and is sold again at a price of 6.9 yuan, what rises in the subconscious of consumers is definitely not the joy of “picking up a leak”, but an extremely strong feeling of being deceived.

People will quickly calculate in their minds. If today you can buy the same packaging and the same light milk for 6.9 yuan, and the company can even maintain profit operation at this price, then how much unreasonable premium has Zhong Xuegao extracted from us in the past few years?

This cliff-like price plunge has essentially completely destroyed the high-end quality that the brand has worked so hard to establish over the past few years. Although the brand has changed owners, the change in business entity cannot automatically erase the public’s old impression of its high price.

Not only did the price reduction not clear up the past, but it was like a piece of evidence presented in court, confirming the label of huge profits. Not only will the public not pay immediately, but they will hold their money and wait to see the actual value of this new product with a strong sense of scrutiny.

In this whirlpool of public opinion, Zhong Xuegao is not without chips. In the dimension of “comparative evaluation and brand preference”, as many as 87% of positive voices expressed their nostalgia for this brand. The recent hot searches are precisely the concentrated realization of this emotional asset.

But doing business cannot rely solely on feelings to generate electricity.

There is a huge gap between emotional equity and real purchase conversion. Zhong Xuegao’s past marketing has indeed effectively established his popularity, and he can still rely on nostalgia to revive attention to this day. But for the category of ice cream, consumers’ decision-making logic only has the following points: delicious, cheap, trustworthy, and suitable for daily purchases.

For today’s new Zhong Xuegao, what consumers really care about is no longer those fancy brand stories, but whether this kind of people-friendly price can bring equivalent product power, and whether this kind of pricing is transparent enough.

If you only rely on following the trend and nostalgia online without providing reassuring transaction value at the terminal, this kind of online attention will soon melt away like ice cream under the scorching sun.

Price of Zhong Xuegao’s products Source: E-commerce platform

底氣：

More cost-effective than freshly made ice cream

Since the price reduction is facing a huge trust backlash, why does Zhong Xuegao price it at 6.9 yuan? Where does the confidence come from?

In the past three years, the reason why Zhong Xuegao has been nailed to the pillar of shame is because the price reference system is wrong.

When you open the freezer of a convenience store on the street, there are green moods for 3 yuan and small puddings for 2.5 yuan. In this category of pre-packaged ice cream, Zhong Xuegao, who pays more than ten yuan, looks disgusting.

Consumers don’t care what special cocoa powder you use, they just feel that their wallets have been mercilessly emptied.

However, in recent years, the ecology of the ice cream market has been undergoing drastic changes. A small cup of freshly made gelato costs 30 to 40 yuan in shopping malls, and smoothies cost 20 to 30 yuan in new tea shops. The biggest pain point of these high-priced ice cream products that claim to be handmade is that they rely heavily on store workers, and quality control is like opening a blind box. It is common to spend money on Haagen-Dazs but end up with a mouthful of ice cream.

The phrase “It feels much more unpalatable than Zhong Xuegao” just hits this common market sentiment. With these high-priced and unpalatable ready-made products as a foil, consumers’ psychology has undergone an extremely subtle reversal.

Everyone suddenly discovered that although Zhongxue Gao was expensive in the past, it represented a stable and high standard of industrialization. No matter where you buy it in the freezer, the extremely low puffing rate, rich taste, and clean ingredient list are all stable and predictable.

At this emotional turning point, the new price of 6.9 yuan entered the game, which seemed to be more than enough. It no longer competes with the old popsicles for cheap, but secretly conveys a strong psychological implication to the public: for less than seven yuan, it can buy the ultimate quality control that cost more than ten yuan in the past, and replace the more than thirty yuan of freshly made ice cream in the mall that is often criticized.

With this new psychological anchor, Zhong Xuegao’s original sin of high price, which was originally ridiculed by the crowd, was directly replaced with a layer of “industrial conscience” filter.

Hot posts from consumers about Zhong Xuegao Source: Xiaohongshu

風險：

Do offline retail terminals buy it?

Zhong Xuegao’s confidence in cutting prices has a lot to do with its new shareholder, Royal Tiger.

Not long ago, 508 intangible assets including trademarks and patents under Zhong Xuegao were auctioned by the judiciary and were finally sold for 21.1 million yuan. Standing behind the buyer is the parent company of frozen food giant Royal Tiger.

Royal Tiger is an omni-channel quick-frozen giant that started out with pure meat grilled sausages and hand cakes. It was able to achieve annual sales of more than one billion in a very short period of time because of its extremely terrifying cost control. They have dozens of self-operated warehouse networks across the country, reducing the fulfillment costs of cold chain logistics and warehousing and distribution to the lowest level in the industry.

The reason why Zhong Xuegao collapsed back then was that the high cost of cold chain fulfillment was the fatal injury. In order to ensure that the high-creamfat ice cream does not melt during distribution, a large amount of dry ice, special foam boxes and high cold chain freight have pushed up the cost, forcing the brand to use high pricing and high gross profit to survive, and eventually it was counterattacked by sinking channels.

Now, the new owner has completely gotten rid of old Zhong Xuegao’s huge old debt of 782 million, and directly injected Royal Tiger’s extremely cost-compressing cold chain system into it. Under the new supply chain model, the factory end has been completely reconstructed, and 6.9 yuan is a sound business that has been carefully calculated and has room for large-scale profits.

However, although factory fulfillment costs have been reduced, the real crisis has shifted to the retail terminal.

At that time, Zhong Xuegaoneng quickly spread convenience stores in first- and second-tier cities across the country. The core driving force was to provide huge profits to the channel. The profit from selling one Zhong Xuegao can equal that of selling several ordinary ice creams, so the terminal is naturally willing to add fuel to the fire.

But now, the price has been directly reduced to 6.9 yuan. This means that the profit pool left for dealers and terminal retail stores at all levels has been greatly compressed. In the case of meager profits, if affordable ice cream wants to survive offline, the only weapon is the ultimate sales turnover rate. This is also the fundamental reason why traditional dairy companies can dominate the freezer. Although the profit per product is small, if ordinary people take it with their eyes closed, they can sell out several boxes a day.

The new version of Zhong Xuegao is therefore stuck in an extremely fatal sandwich layer. The price of 6.9 yuan cannot provide the boss with a single huge profit, and it lacks the deep-rooted national turnover habits of traditional giants. When the moat of profit disappears and faced with the strict freezer defense and queuing agreements of traditional dairy companies, if Xin Zhong Xuegao insists on fighting hand-to-hand in a street freezer, there is a high probability that he will be squeezed into the bottom corner to collect dust.

What is even more dangerous is that under the dual pressure of extreme cost reduction and channel profit recovery, the ingredient list can easily become the price of compromise. Consumers have sharp tongues. Once there is a perception that “cheapness is due to cutting corners” on the product side, this last trust asset will be gone, and the brand will really have no chance of making a comeback.

機遇：

Community group buying and stocking e-commerce

Since the offline freezer is a narrow door and the ingredient list cannot be easily changed, what is the hope of breaking through?

This precisely points to the core strengths of the new owner Royal Tiger, namely community group buying and home e-commerce packaging.

Combined with the off-season launch schedule in the fourth quarter, Xinzhong Xuegao’s strategic intention has been very clear, to avoid the marketing involution of offline freezers in summer and completely change the sales scene. It is very likely that it will give up the online retail of single bottles, and instead rely on the new owner’s extremely mature online cold chain warehouse distribution network to focus on multi-packs for families.

Move the battlefield from convenience stores to community group buying, live broadcast rooms and home refrigerators and freezers. When consumers buy a box of ten Zhong Xuegao at a more cost-effective price for home stocking, this kind of centralized distribution on a household basis can not only dilute the cold chain logistics cost of a single tube to the extreme, but also cleverly avoid the head-to-head confrontation with traditional giants offline.

From expensive desserts showing off on the streets to daily rations for staying at home and watching dramas. This kind of dimensionality reduction in consumption scenarios is the closed business loop that 6.9 Yuan Zhong Xuegao can really run through.

Price cuts cannot save Zhong Xuegao as the new consumer assassin. That era has turned over. But under the extreme supply chain reorganization, 6.9 yuan does leave a way for it to survive.

It needs to shed all its arrogance, be careful with its meager profits, and honestly make a popular ice cream with smooth channels, transparent pricing, and affordable for ordinary families.

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