Tag: branding

Are American Brands Losing Their Aura in Asia?

Posted on December 8, 2011

When Hollywood actor Tom Cruise came to India in early December to promote the fourth installment of Mission Impossible, he didn’t realize how difficult the mission would be. He was all smiles when he stepped out of Mumbai Airport on December 3 to be greeted by an ecstatic crowd of fans.

The next day, however, the Mumbai Mirror newspaper reported that this was no spontaneous congregation of fans. “The crowd gathered at the airport had been paid to be there by the organizers of [Cruise's] trip, with the price ranging from Rs. 200 to Rs. 400 ($4 to $8), depending on how ‘experienced’ each member of the cheering squad was,” the paper reported. As a bonus, the crowd also received a buffet lunch.

“Who knows Tom Cruise?” asks Nantoo Banerjee, author of The Real Thing: Coke’s Bumpy Ride through India. “I saw a large crowd going towards the Taj Hotel [in South Bombay where Cruise stayed]. I asked a couple of them if they were trying to catch a glimpse of Cruise. ‘Who [is] Cruise?’ they responded. ‘We are going for the Navy Day celebrations.’”

Nobody is publicly taking responsibility for hiring the 200-strong crowd. The organizers of the trip, global event management company Wizcraft, says the report was a fabrication. “False information has many takers,” Wizcraft founder-director Sabbas Joseph says. “The report in Mumbai Mirror is a figment of the journo’s fertile imagination.” Perhaps. But the article has since been expanded on by other media outfits, such as the BBC.

“In India, people are hiring crowds all the time,” notes B.N. Kumar, CEO of Concept PR, an image management company. “Politicians hire crowds for their public meetings to show how popular they are. Bollywood [Bombay’s Hollywood] hires crowds for their movies. Even labor unions hire crowds. So what’s the problem with a Cruise crowd?”

But is the incident a reflection of a larger trend? Are American brands losing their sheen in many Asian countries?

There was a time after Coca-Cola had left the Indian market that the soft drink was the ultimate status symbol in the country. At ostentatious weddings, people used to serve illegally imported Coke. The unofficial price was $3 a can, compared to the pre-exit price of just 10 U.S. cents. “Today, many years after [Coca-Cola is once again for sale in India], it is still not the largest-selling cola,” says Banerjee. That honor goes to Thums Up, a local brand bought by Coke.

“Many Western products in India have had to change,” to fit the local audience, Kumar adds. MTV and Channel V, an international music network with headquarters in Hong Kong, have been totally Indianized. Two-wheelers and four-wheelers have been extensively re-engineered. Even McDonald’s has a very different menu at its India locations.

“Today, we are being wooed as a country by brands from every geography — the West and the East alike. In the bargain, there is a surfeit of choice. The mother brand market of them all — the U.S. — is just another one of them,” notes Harish Bijoor, brand-strategy specialist and CEO of Harish Bijoor Consults.

U.S. brands face challenges that come from extrinsic factors. “McDonald’s is probably the only U.S. brand that still thrives in Pakistan,” notes Kumar, who has just returned from an extended trip to that country. “Pakistan has become very anti-American and that is reflected in the response to American brands, too.”

Several thinkers and writers — Niall Ferguson in his 2005 book Colossus: The Rise and Fall of the American Empire, for one – have spoken about the U.S. losing its stature and power in the global landscape. This trajectory is about larger geopolitical and moral ascendancy issues, observers note. But do they also impact the market for Coke, Crest and Campbell Soup? Says Bijoor: “The Indian is a much more mature brand person today than he was yesterday. Therefore we do not go gaga, as we would have in the past, when Lady Gaga hits Indian shores.”

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The World’s Top Cycling Team Has It All

Posted on August 15, 2011

The announcement shook the cycling world: HTC-Highroad — seen by many as the best team in the world — is disbanding due to lack of funding, owner Bob Stapleton announced earlier this month. Stapleton said that efforts to re-sign current sponsor HTC, or replace it with another company, had finally come to an end.

In an article in Cycling News, Stapleton said he was “frustrated by the indecision of our title sponsor HTC who, after many months of assurances, had not come forward with a commitment to the team.” That behavior “remains a mystery to me,” added Stapleton, who is now urging riders on both the men’s and women’s teams to join other squads for the 2012 season.

According to Cycling News, Stapleton’s call for funding included reminders that the team “had generated in the region of $400 million in media exposure during its tenure in the sport.”

How could such a high profile team — which had made a respectable showing in this year’s Tour de France, and whose owner is widely respected as a savvy, ethical businessman — take such a fall? Knowledge@Wharton financial coordinator Dominic Johnson — an avid cyclist — suggests that the team’s failure to find a new sponsor is due to several things: the bad economy, lack of TV revenue sharing in cycling, and of course, the many doping scandals which make cycling sponsorship less attractive. But he says the brand issue is the most interesting aspect of this: “Unlike most American and European team sports, where there is a team name/brand based on a location or mascot (Phillies, Chelsea, Giants) — and sponsors of that brand by association — cycling teams are generally named after their title sponsors,” he notes, citing Garmin-Cervelo, Saxo Bank Sungard, Rabobank and RadioShack as examples. 

One might assume that “sponsors would love to be the brand of the team,” Johnson adds, “since in those other sports, no matter how much money a sponsor gives, there will never, I hope, be the ‘Pepsi Phillies.’ However, my feeling is that the lack of non-sponsor brand and constant change in team names make it difficult for fans to really get behind a certain team. For example, the team I support has gone from Slipstream-Chipotle, to Garmin-Chipotle, to Garmin-Slipstream, to Garmin-Transitions, to Garmin-Cervelo, all since 2007.”

Wharton marketing professor Leonard Lodish, also an avid cyclist, has a different take: “I think the issue is not branding of the teams. If a sponsor has a consistent positioning that is reinforced or strengthened by being named as a cycling team, then it has a chance of being more profitable in the longer run,” says Lodish, who several years ago took a 40-day, 3,238 mile bike trip across 14 states with his wife. “The bigger issue seems to be the costs of the sponsorships versus their possible incremental value. Without TV revenue sharing and with the risks of negative associations with doping, I don’t know any company that I would recommend take such a risk.”

The problem, adds Johnson, “is a self-reinforcing one. The low incremental value causes the sponsorship turnover, which then completes the cycle by not allowing a sponsor to gain a strong position and return on investment.” Until there are enough companies willing to stomach the initial low returns and risks in order to build a brand and a team, “we are unlikely to see any significant changes.”

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Marketing Keds to a New Generation of Feet

Posted on February 24, 2011

If you were a kid anytime in the past century, you probably owned a pair of Keds. The ubiquitous canvas sneakers are undergoing their latest makeover in an effort to build buzz among a different constituency — 20-somethings.

To do that, a 32-foot trailer designed to look like a shoebox is hitting the road for stops at U.S. college campuses. The “How Do You Do?” campaign invites students to design their own shoes at a touch-screen kiosk and purchase them. Each stop will feature shoes inspired by that city — for example, the March stops in Austin, Texas feature shoes in denim, chambray and twill with Western details.

“As people go through identity crises, so do the brands,” Kristin Kohler Burrows, president of Keds Group told The New York Times. She said one of the goals of the campaign is to “awaken people to the fact that [Keds] is an iconic brand.”

Keds were first introduced in 1916. By 1930, the company had unveiled a line of high-heeled shoes — dubbed “Kedettes” — in an effort to appeal to women. The shoes have adorned the feet of Marilyn Monroe, Jackie Kennedy and Katherine Hepburn.

And this wouldn’t be the first time that Keds have been a trend among young people. In the 1980s and 1990s, they had a place in the closets of many teenage girls, alongside babydoll dresses, slouch socks and lace-trimmed bike shorts. Keds also tried to attract a similar audience in the mid-2000s, when actress Mischa Barton — then starring on young adult-centric mega-hit The O.C. — became the shoes’ spokesperson.

Now the company is trying to appeal to the millennial demographic by featuring artists and young people giving back to their communities in its ads. Keds is also running a design contest, and adopting a campaign Twitter hashtag. “We really feel that what’s important to this consumer is to engage with a brand” and experience it firsthand, Kohler told the Times.

Maintaining the “cool” factor of any product is a tricky proposition. In a past Knowledge@Wharton story, marketing professor Jonah Berger noted that fashion is fertile ground for fads because clothing is a way to communicate something about a person’s identity and style. “Styles often start with one group, and then another group starts to use it because they want to look like that first group,” Berger said. But when that second segment adopts the trend, “the meaning may be lost.”

He and other faculty said it is critical for brands to understand the potential value of a product before pouring money into keeping it current. The Times story reported that Keds spent $1.68 million on advertising from January to September of last year, compared to $450,000 during that same time in 2009. “You should only invest in things where you can do a credible job of forecasting that the perceived value of your offering compared to your competition will be sustainable,” Wharton marketing professor Leonard Lodish told K@W. “You need to understand the factors that will make that happen.”

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