ZIBS Blog

It has been 35 years since its founding and hip-hop continues to thrive in urban America. Once a block party fad that started in the Bronx, New York, hip-hop is now a $4 billion-a-year-music industry that spans the globe. Although it has always been the voice of inner city youth and young adults, hip-hop has evolved to include the 25 to 34 year-old demographic segment. Proving its staying power, for the past five years hip-hop remains the top-selling genre over country music and is second only to rock music.

Formerly known as rap, hip-hop is a moving cultural force that first garnered the attention of corporate America in the early 90’s. When hip-hop made its debut into mainstream, corporate heads began to turn. Enterprising brand managers embraced the culture and soon realized substantial results.

In an effort to be a hip drink of choice, Coca-Cola’s Sprite brand began using rap music in commercial ads in 1994. Sprite Brand manager, Pina Sciarra affirmed that Sprite’s appeal as a favorite soda quadrupled as a result of the ads. Taking notice of Coke’s commercial success, Burger King and several restaurant chains followed suit with similar advertising approaches.

By bringing the edgy styles of favorite rappers to specialty stores, the fashion industry became a key contributor to hip-hop’s brand influence. Department store retailers such as Macy’s took notice and filled their racks with the likes of FUBU, Phat Farm, Mecca, ENYCE, G-Unit, and Apple Bottoms. Traditional designers even realized revenue potential in the hip-hop market. In 1999, Tommy Hilfiger reported a significant increase in annual sales after tailoring his line for “the hip-hop set.” Sportswear giant, Nike expanded its celebrity-advertising list to include hip-hop artist, Nelly. In 2003, Nike released 1,000 pairs of the rapper’s $120 limited edition Air Derrty sneaker. The sneakers reportedly sold out within hours. Luxe designer, Louis Vuitton recently jumped on the hip-hop brand wagon by making musician, solo artist, and Grammy award producer, Pharrell Williams its “new face” for the brand’s 2006-2007 line of Italian suitcases and bags.

Today, the hip-hop influenced urban apparel market does $2.2 billion in annual sales, which includes a celebrity-based designer list from the likes of singer, Beyonce Knowles to entertainment magnate, Sean “Diddy” Combs.

Among its influences, hip-hop transcends boundaries in politics, music, fashion, and other forms of entertainment. With 100 million fans worldwide, hip-hop also dominates many parts of mainstream media. Filmmakers, television show writers, and print publishers for example, are among media professionals who readily incorporate hip-hop lingo and fashion concepts in their products.

Despite the often-negative connotations associated with the culture, booming balance sheets continue to compel companies to use hip-hop’s market appeal to gain leverage.

References
http://www.businessweek.com/bwdaily/dnflash/may2005/nf20050516_5797_db016.htm
http://www.brandchannel.com/brand_speak.asp?bs_id=120
http://usinfo.state.gov/scv/Archive/2006/May/12-522164.html
http://www.forbes.com/business/feeds/ap/2006/07/03/ap2855881.html
http://www.detnews.com/apps/pbcs.dll/article?AID=/20060517/BIZ/605170338/1005/LIFESTYLE
http://www.time.com/time/archive/preview/0,10987,19134,00.html
http://www.nobodysmiling.com/hiphop/news/72003.php
http://www.pbs.org/newshour/bb/entertainment/jan-june99/hiphop_2-24.html
http://www.allhiphop.com/features/?ID=1278
http://www.csupomona.edu/~rrreese/HIPHOP.HTML
http://www.blackelectorate.com/articles.asp?ID=1014
http://www.economist.com/intelligentlife/luxury/displayStory.cfm?story_id=6905921
http://news.bbc.co.uk/1/hi/magazine/5056744.stm
http://www.riaa.com/News/newsletter/press2001/031301_2.asp
http://www.riaa.com/news/marketingdata/pdf/2005consumerprofile.pdf
http://www.icce.rug.nl/~soundscapes/VOLUME02/Trends_and_shifts_in_music_sales.html
http://www.agendainc.com/brand.html
http://msn.com.com/2100-9588_22-5553356.html
http://www.vibe.com/news/news_headlines/2006/06/pharrell_becomes_face_of_louis_vuitton/
http://www.msnbc.msn.com/id/13350034/

Posted by Isha Edwards at 11:43 AM | Permalink | TrackBacks (0)

These days we are seeing quite a lot of co-branding in the ice cream isle. Tie-ins with innumerous candy bars (Godiva, Snickers, Twix, M&Ms etc), SpongeBob, Squarepants, Care Bear, and Disney’s Alladin have all graced the shelves.

However, what is of interest regarding brand essence is found in the superpremium ice cream category. This category is dominated by two brands: Ben & Jerry’s and Häagen Das.

Nestle and Unilever are going at it in the $32.4 billion ice cream market. Nestle merged with Dreyers in 2003 to create an ice cream empire which includes Dreyers, Edys, Starbucks ice cream, Nestle, and Dole fruit and Häagen Das. Dreyers had purchased Häagen Das from General Mills in 2004.

Unilever which owns Good Humor, Klondike and Beyer purchased Ben & Jerry’s in August 2000 for $326 million. Overall, Unilever has 2000 brands of ice cream and the category accounts for about 10% of its revenues.

Unilever thought it was doing a good thing purchasing Ben & Jerry’s. However, one thing it seems to have overlooked is the impact of brand essence. Brand essence represents the core values of the brand, and for the pre-acquisition Ben & Jerry’s this brand essence was quite strong. Ben & Jerry’s was run by two quirky guys that loved ice cream and also had a strong interest in social responsibility. The firm was well known for its environmental advocacy and social conscious sourcing from its headquarters in Vermont. It was seen through the eyes of the consumer as counter-culture and idealistic.

Häagen Das, on the other hand, was known to be simply a high-indulgence ice cream without any of these social responsibility values.

What happens when a massive global corporation purchases a “mom & pop” type of brand? The brand essence suffers from incongruity. As you can see from the chart Ben & Jerry’s is sliding in market share in comparison with Häagen Das, so this brand essence contradiction could be an underlying factor in the brands market performance.

A similar issue happened with Beatrice. Beatrice, a food giant in the 1980’s, found that utilizing a corporate brand often was counter productive, especially on craftsman type of products where the corporate identify was would smother that of the child brand. For small dairy farms the corporate brand’s positive elements would be offset by its negative elements. Beatrice found this all out the hard way and has since vanished.

Acquirers in the M&A world would best learn from these experiences and be sure to measure brand essence to uncover divergent elements in the target brand which would wipeout other potential synergies.

Sources:
Nestle Investor Seminar June 2004, Presentation
Mintel Ice Cream Report June 2005

Posted by Greg Thomas at 03:26 PM | Permalink | TrackBacks (0)

Art is about mythmaking.

Branding is about creating value.

Value creation also can involve mythmaking.

Since branding and art both involve mythmaking, it seems natural for art and branding to collide. That is exactly what happened with Prada Marfa.

Many people are quite familiar with Prada, the Italian fashion company which holds prime space in elite urban shopping centers around the globe. When Prada opens a new store in downtown Tokyo…well that is something that is expected.
What is completely unexpected is to find a Prada in Marfa, Texas. The town of Marfa is located in the West Texas desert near the Mexican border. It has a population of 2,121 and is about 9 hours drive from San Antonio.

In 2005, two Scandinavian artists installed a Prada mini-boutique in the desert 26 miles from Marfa. This sculpture is a 15 by 25 foot adobe building designed to look just like a Prada store, and even contains Prada merchandise. The main differences between this sculpture created by Michael Elmgreen and Ingar Dragset and a real Prada store are:
 It is completely out of context
 It is a mini version
 It will never open
 It will not be maintained

Well, the last item is debatable. The sculpture was vandalized soon after it was finished. Shoes were stolen and the building was spray painted with graffiti. After that break-in happened a handyman restored the building.

Art and clothing are intertwined. Clothing is already woven with myth. If you think about the functional value of clothing on Maslow’s hierarchy of needs you simply need clothes to stay warm. If that is all that mattered about clothing, then a $3 shirt, $10 pants, and $5 sandals from Walmart would suffice. That is a complete ensemble for less than $20. So, why then do people spend upwards of $500 on a mere shirt from Prada?

Clothing is transformational. It is aspirational. It is enveloped with social meaning. People are paying $3 for the shirt and $497 on symbolism.

By supporting the artists in this desert adventure, Prada reinforces its sphere of meaning beyond simple utility of clothing. As doing so it becomes a more interwoven part of the lexicon of the art world. And the myth grows.

Weblinks:

- Prada Marfa website

- article

Posted by Greg Thomas at 12:06 PM | Permalink | TrackBacks (0)