Success is also low price, failure is low price, “Michelle Ice City” may not be sweet

"You love me, I love you, Michelle Ice City is sweet."

Because the melody is cheerful and brainwashed, and the lyrics are catchy, the theme song of Michelle Ice City is out of the circle. The original song "Oh! Susanna" is an American country folk song, once popular all over the world, but now Michelle Ice City has become synonymous with this melody. Suddenly, English, Russian, Japanese, Thai and other national versions, as well as Cantonese, Sichuan dialect, Wenzhou dialect, and Northeast dialect versions emerged in an endless stream. Netizens returned to the basics and expressed their love in the most direct way.

▲"Michelle Ice City Northeast Branch". Picture from: B Station UP Main Shengtu

Putting aside the label of "You love me, I love you", the biggest feature of Michelle Ice City is its low price. This tea brand, which started in 1997, seems to have been dormant for nearly 20 years, and has only frequently entered the media and the public's vision in recent years. In 2019, Michelle Bingcheng ranked third in the top ten tea brands in China. In June 2020, Michelle Ice City became the first tea brand with a store exceeding 10,000.

The low price of ice cream for 2 yuan and lemonade for 4 yuan gave Michelle Ice City a leading position in the sinking market. It took more than 20 years to expand to its current scale, but at the same time, the low price will also Limit its future.

Simple, direct, repetitive and fast

Bright red and white signboards, huge advertising banners, and stereos that broadcast discount messages… When we walk on the street, it is easy to be attracted by the hypermarket-style Michelle Ice City store, or it is for fear that you will not see it. it.

Walking to the front of the store, you can see the menu of Michelle Ice City. Fruit tea, ice cream, and cheese milk tea are clearly classified. The main products are made into pictures for consumers to see clearly. Ordered a glass of lemonade, the clerk took out the cup with sliced ​​lemons from the fresh-keeping cabinet, made it for you and packed it in a few seconds.

▲ Michelle Ice City store.

This is the overall impression that Michelle Ice City brings to consumers, simple, direct, repetitive and fast.

The theme song of "Michelle Ice City Sweet Honey" is also in line with the consistent brand tone of Michelle Ice City, which unknowingly occupies the minds of consumers. In the past, when consumers think of it as 2 yuan ice cream and 4 yuan lemonade, there should be this song "Michelle Ice City Sweetness" now.

Over the years, Michelle Ice City has never shy away from some "low-end" brand images, but it has appropriately upgraded its brand to maintain "low prices" and focus on creating "good quality."

The popularity of the theme song is not only due to the melodies and simple lyrics, but also due to the naive "Snow King" in the animation. Snow King is the new brand image launched in Michelle Ice City in 2018. A snowman holds an ice cream scepter. Michelle Ice City has launched many Snow King surroundings, and also exclusively titled the Zhengzhou Ice Cream Music Festival, striving to promote the brand's "new spokesperson". Now the official blog of Michelle Ice City calls itself "The King", with its own cute attribute, which makes the atmosphere in the comment area very harmonious.

Michelle Ice City’s social marketing is also very direct, which is to give consumers small and frequent discounts. The "Follow + Repost" lottery to send 5 cups of lemonade, or give out 2000 1 yuan coupons, is the most common discount activity. These coupons cannot be used in stacks, and the unit price of Michelle Ice City itself is not high. Social marketing is more to maintain the popularity of daily interaction and increase the repurchase rate.

At 520 this year, Michelle Ice City launched a campaign to send couple cards after spending 2 cups. While the popularity is not bad, there are also a lot of negative feedbacks. For example, if you buy two cups, you will only give one card but not one pair, and you can’t go to the store alone for long-distance love. The photos of the collar and synthesized are not like me, cannot upload group photos, etc. It can be seen that Michelle Ice City is relatively rough in the specific operation of marketing activities, or lacks experience.

Whether it’s the upgrade of brand image or the success or failure of marketing activities, Michelle Ice City’s precise perception of its own brand can be explained. There are small discounts that are accessible, and small events that are easy to communicate and spread, but at present are far from reaching the standard of "small and beautiful."

Success is cheap, failure is cheap

Michelle Ice City started in 1997, and it started as a shaved ice stall. In 2006, the founder Zhang Hongchao developed fresh ice cream for 1 yuan and 1 stick. This is the result of precise cost control and then pricing. It is not only the key to Michelle Ice City’s success, but also its innate brand. gene.

▲ The former Michelle Ice City.

After 1 yuan and 1 ice cream became popular, Michelle Ice City opened 26 franchise stores in a few months. In 2008, there were more than 180 franchise stores. Now the number of Michelle Ice City stores is close to 15,000. It will reach 20,000 by the end of the year.

Michelle Ice City’s stores are mainly concentrated in third- and fourth-tier cities and university towns across the country. Young people and students are its main consumer groups. Their spending power is average, but their population base is large and their consumption frequency is high. What attracts these consumers is the low price and good taste, not the brand tonality or other factors.

In terms of taste, consumers appreciate Michelle’s ice cream and fruit tea. These two categories are also Michelle’s signature products. Michelle’s milk tea is generally unpopular.

There have always been suspicions that the raw materials are cheap. Individual stores put the raw materials at the door, stating that some drinks are brewed with powder, but the price is written there, consumers will have a subconscious-"all so cheap." What kind of bicycles do you need?" As long as hygiene is maintained, the consumer's tolerance threshold will be higher, and some people are in the mood to ridicule Michelle Ice City for "not treating consumers as outsiders at all."

Brand tonality is too clear and has side effects. In 2018, Michelle Ice City tested the high-end market and launched its own sub-brand, the high-end tea brand "M+", at a price of about RMB 20, but it did not arouse any splashes. Prior to the launch of "M+", Michelle Ice City also tried high-end stores around 2009, but insisted on sluggish income for two and a half years, and finally emptied the store in only one day.

This shows that the brand tonality of tea is very important and difficult to reverse, especially for the tea brands that are mainly targeting the sinking market, it is difficult to go deeper into the front line.

In contrast to Michelle Ice City, Hey Tea has launched a sub-brand of Hey Xiaocha. The main price is 11-16 yuan, and the lowest price is 6 yuan, which seems to be aimed at the second and third tier markets. It’s hard to say whether Xixiaocha will damage the brand tonality of Xicha, but its positioning is obviously different from Michelle Ice City. Now the stores are mainly located in the core business districts of first-tier cities, new first-tier cities, and second-tier cities. The product quality and consumer experience with a price of 11-16 yuan also have certain possibilities for exploration.

Michelle Ice City's Wealth Code

Today, Michelle Ice City can only defend the sinking market. "The rival of Michelle Ice City is not other milk tea shops, but bottled drinks in supermarkets." This sentence may make sense both positively and negatively.

Michelle Ice City can be so cheap because of its low cost. In-depth cooperation with tea farmers, self-produced core raw materials, self-built warehousing and logistics centers to achieve free delivery of materials, low rent and labor costs in third- and fourth-tier cities, these detailed subtractions have reduced the cost of Michelle Ice City to the lowest.

One of the interesting points is that Michelle Ice City will use multiple combinations of raw materials to create new products, try not to add new materials, so that the original materials are reused to reduce inventory. For example, the popular shake milkshake is a new product created with the original ice cream, jam, syrup, etc.

However, the way of making Michelle Ice City drinks is relatively simple. Lemonade for 4 yuan looks cheap and easy to make. It is 40 grams of lemon, 55 milliliters of fruit nectar, ice cubes and water. It may be a healthier choice to make a glass of lemonade yourself at home.

Small profits but quick turnover is not the only profit method of Michelle Ice City, or even the main profit method. The real wealth code of Michelle Ice City headquarters is actually the franchise fee of the store and the purchase of materials by the franchisee. To open a Michelle Ice City in a county-level city, the initial fee is 7,000 yuan/year, but including equipment fees, raw material costs, security deposits, store decoration costs, etc., the cost to the Michelle Ice City headquarters is at least 350,000 yuan .

All Weather Technology interviewed Michelle Ice City franchisees in May of this year, and obtained a set of data: "Now joining Michelle Ice City, there is a 20% chance of closing the store, 30% making money, and 50% breaking even." Everyone thinks. Those who want to enter the game want to be 30% of the money, not the 20% who closes the store, but most people are the remaining 50%.

The franchisee wants to share a piece of the tea that sinks in the market, but he does not know that he is the praying mantis that the oriole is staring at. How much of the turnover accumulated by a cup of ice cream for 2 yuan and a cup of lemonade for 4 yuan is the net profit of the franchisee? Small profits but quick turnover, more work and more gains are actually more appropriate to describe franchisees.

▲ The 10,000th store in Michelle Ice City.

According to the flow of people, it is possible to open a store, charge various fees from franchisees, and use raw materials and supply chain to make money. This "one-stop franchise" is the way to get rich in Michelle Ice City.

However, Michelle Ice City does not have regional protection measures for franchisees. The scale effect has written the myth of breaking through 10,000 stores as soon as possible, and it has also brought follow-up concerns. Now it is not easy to find a site that meets the flow of people, and more and more franchisees will have their profits diluted. "The competitors of Michelle Ice City are 4 milk tea shops with the same name within 500 meters." It also makes sense.

Close to the consumer

Some time ago, three stores under Michelle Ice City were exposed to food safety problems, including tampering with the date labels of the ingredients opened, changing or not recording the "validity tracking card" of the ingredients at will, illegal use of ingredients such as overnight milk milk, and not washing the lemon skin.

▲ Michelle Ice City staff changed the opening date without authorization. Picture from: The Paper

Is this an individual case or a common phenomenon? People who have worked in Michelle Ice City have different answers. Some said that they were instructed by their boss, "Don’t pour the green tea and Four Seasons Spring Evening before you run out. The fruit is also put in the freezer for the next day." The bucket is thrown out after the specified time, and the hygiene is cleaned several times a day, so it won’t be unclean.”

Under Michelle’s apology Weibo, most consumers have a more tolerant attitude, hoping that Michelle’s ice city will strengthen store management and not let a mouse poop spoil a pot of porridge, or even take this opportunity to "threat" a certain drink. Re-listed. When the prices of Heycha and Naixue no Tea increased, Michelle Ice City’s announcement that they would not increase prices also attracted a lot of goodwill.

Compared with the hygiene problems of individual stores, consumers seem to be more unbearable to the service attitude of the staff. On Michelle’s official Weibo, there are a lot of complaints and complaints about clerk’s service, such as arrogant attitude, repeated forgetting to add ingredients, non-cooperation with official activities, and so on.

▲ Consumer complaints about services.

The former "I don't think you are poor, and you don't think I am Low" evolved into "It's not that we look down on them, they all stepped on our heads." This is a bit subtle. Although the brand image has been formed, if the service and attitude cannot keep up, the momentary harmonious relationship between consumers and the brand can easily break.

In a sense, because of the long-term low-price strategy, Michelle Ice City and consumers are now jointly maintaining the standard of "good quality and low price". This is not only the expectation of consumers, but also the bottom line of consumers. It cannot be broken. . Michelle Ice City should need to think again, how to better adhere to the quality and low price, ensure service, quality control and food safety, and hold on to the sinking market. This is the only way it can go.

Michelle Ice City, which started in 1997, is the brand with the largest number of stores in China's tea industry, and it was the first to bring the tea industry to the scale of 10,000 stores. It grew up in a stall economy, with low-cost genes by nature, and quickly occupied third- and fourth-tier cities and below by franchising mode. It is praised by consumers for its high quality and low price. What the media analyzes is how to control costs in various ways. At this point, Michelle Ice City has been like a day for more than 20 years.

After the expansion to a certain extent, whether it is brand tonality, consumer consumption habits, or management problems of 10,000 stores, it will be difficult for Michelle Ice City to transform into the high-end market, and it will also affect its demand for more dimensional innovations. The consumer era goes long-term. But for some time to come, Michelle Ice City will still stand firm. The reason is simple, because it is still the cheapest on the street on this highly homogenized and highly competitive tea-drinking track.

Grapes are not the only fruit.

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