An important element of internal brand readiness is preparing employees for change through effective internal communication and resource deployment.

The next version of Microsoft Windows, named Vista, is due out in 2007. It is making a preliminary version of the program available in advance for company employees. What does Microsoft do for internal awareness? It quenches its employees thirst and reminds them of the launch at the same time with a customized can of lemon-lime sparkling water.

Our bodies consist of 75% water and people have to drink liquids often to replenish this water balance. As such, this liquid ad appears to be an effective method of ensuring employees remember the important stuff. Microsoft might not have invented the notion of the office desktop billboard, but it seems to be making efficient use of it for internal branding.

Source:
“The Insider: Microsoft rolls out Windows Vista, the soft drink,” Seattle Post Intelligencer, Monday, July 31, 2006
Web: http://seattlepi.nwsource.com/business/279428_theinsider31.html

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/

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

The innovative part of this new product/service, aside from the actual cool-factor the iPod and Nike brands bring to the table, is the user interface Nike runs on nike.com to complement the product/service. The extension of the experience with the brands may be the key factor to making this product stick with customers. The key differentiation for this UI is the attention to design. It’s intuitive and easy to understand and interpret. Both the aesthetic and functionality make you want to get up off the couch, pull on those Nike shoes, strap on your iPod nano and run like the wind, just to see it working!

The real innovation here is the continuation of the Nike brand and iPod brand using a synergistic approach to building a brand experience. The value derived from the experience for the runner is enabled to be an emotional one; thus, a bond is created. And then to further develop that bond (or nurture that customer relationship) Nike built an engaging community encouraging ongoing interaction, input, creativity, and, ultimately, (and here’s the key, branding folk) a relationship.

We’ll have to wait and see if it success ensues. From a brand angle it sure seems like it will be off and running in no time flat.

Talk about the following: Innovation, Branding, and Design.

Of course you don’t ever have to actually suggest a plan of action for making those key ideas and buzz words a part of your corporate culture or business strategy, but rather just sprinkle them in. A lot of people have been doing a lot of sprinkling these days. Talk, talk, talk. Very little action. We’ve seen what these “in” ideas and words can create in the case of P&G or IKEA or Target or Apple [And the list goes on] but really, how do these exemplary businesses turn a couple of big ideas and words into an action and an executable strategy that can sustain? How does a brand successfully leverage design to create innovation manifesting itself into a cutting-edge, desired, and obsessed-over brand?

Look no further than Mr. Nussbuam’s new magazine venture, INside Innovation. This magazine will “teach managers how innovation really gets done”. [Check it out for yourself: it goes live tomorrow night, June 8, 2006.]

What a great concept. You know Bruce Nussbuam as the BusinessWeek authority and guru on all things business, design, and innovation. Giving structure to what the majority sees as obvious and yet ambiguous is a behemoth task. But kudos to Mr. Nussbuam for taking on the challenge, for his expertise and the knowledge to surround himself with folks of the same caliber should prove inspiring and intriguing and will surely incite much debate. And, oh, how I love a good debate!

Speaking of which…

How to get [design] people all riled up.

Undermine their role by holding a contest rather than a client review from an employed design team/firm. Check out DesignObserver’s blog for the latest debate on this one. [Make sure you’ve got some time to read. You’ve been warned.]

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

For those of us around long enough to remember that music was played on vinyl records, the apple logo was pretty famous. It is not the same apple logo that is associated with iTunes, but rather the apple logo that represents George, John, Paul and Ringo who you might remember as having the band called the Beatles.

Apple Corps is the company that was formed by the Beatles members and its main division, Apple Records, served as their record label. Apple Corps also included several other divisions in its portfolio including Apple Electronics, Apple Films, Apple Publishing and Apple Retail. The Apple Corps logo was based on the well known painting by Rene Magritte whose painting Paul McCartney acquired.

In 1981, Apple Corp sued Apple Computers and the latter agreed to restrict its use of the name to computer products. In 1991, Apple Corp sued again as the computer company started branding music synthesis products. As a result Apple Computers paid $38 million for the settlement.

If you seek out Apple iTunes on the web you will find it on the Apples Computer website. This website is undoubtedly branded with the Apple brand. So, it looks like even after two law suits about the trademark the management that launched iTunes overlooked the legal implications of launching the offer which directly overlapped with Apple Corps core business (pun intended). The case was recently tried in London and judge has not yet declared the ruling. If the judge rules against Apple Computers for the third time it could be a costly oversight for company as it quite possibly could have to pay a royalty on all future music sales on iTunes.

In the Hotel industry beds are front and center in the brand offer. That is why Marriott spent a year designing and testing its new luxurious bed which features “Down Surround” pillows, a down comforter with duvet cover, and a lightweight down blanket on a plush pillowtop. This was a mammoth undertaking involving 628,000 beds at over 2,400 hotels. The hotel touts the project as using 30 million meters of fabric, enough to stretch 75% around the world.

This all appears quite wonderful for the weary traveler, but it seems like Marriott overlooked the operational impact of the program on the housekeepers at the hotels. Housekeepers must change 16 rooms a day (containing 26 beds), and now with all the extra pillows and duvet covers they have less time to do each task. In a UCSF study researchers found 62 percent of housekeepers has seen a doctor for pain and 84 percent were taking medicine for pain they incurred at work. And these housekeepers are voicing their discontent with the program. When employees are unhappy, it’s bound to rub-off on the customers whether consciously or subconsciously. And that negativity will offset positive gains in the brand experience. Marketing actions impact business operations and it’s the entire process that needs consideration when developing new brand value.

In the development of brand value the new programs launched often have wide ranging implications and yet too often we see companies launching programs without thinking through the legal, operational or other consequences.

For quite some time the world of product development has focused on process management. That is because the engineers in product management understand that working with established procedures in new product development helps by reducing the chance of malpractice. Even commercial airline pilots who all are highly skilled professionals that fly commercial aircraft every working day use preflight checklists before takeoff. The pilots do not simply check the gas gauge and decide to make a go of it. There is something to be learned here. The brand experience is delivered cross-functionally and understanding the entire process of brand delivery is the perspective brand managers need to adopt. This is a call for action for brand managers to document, process map, and double check the flight plan before taking the controls.

Related Links:
- Apple Corps
- Apple Computer

Sources:
- After a Year Designing and Testing, Marriott Introduces New Bed, Featuring a Seven-inch Jamison Mattress, Hotels-Online.com, Accessed April 17, 2006

- 628,000 Marriott beds to get luxury makeover by the end of the year, CNBC, Accessed April 17, 2006

- Battle of the beds, SFGate.com, Accessed April 17, 2006

- A Couple of Apples Square Off, Wired.com, Accessed April 17, 2006

The Apple Corps logo is protected by copyright and/or trademark. It is believed that the use of low-resolution images of logos to illustrate the corporation, sports team, or organization in question qualifies as fair use under United States copyright law.

Talk about co-branding. One of the world’s leading medical research institutions is lending its brand to a skincare product line.

It’s nothing new as far as co-branding a newly launched brand with that of an established one. What is new is this established brand is one of the most-respected in the world with an image and identity that evokes prestige, trust, and cutting-edge innovation, not to mention its highly world-wide level of awareness. With such a positive and respected association it is only right that Cosmedicine would want to associate its foray into the market on a platform of that breadth and depth. On the other side of this brand association is J. Hopkins with its brand associated to a no name, no brand skin care line. Brand-wise, there is a fundamental disconnect with respect to the Hopkins brand.

A strong and trustworthy image and identity are hard enough to come by in such a trend-oriented industry that cosmetics happens to be. The cosmetics industry has most recently been using “science”, or at least the label, as a driver for new product marketing; thus, it seems that with each passing day comes a ground-breaking research study on a touted new (or old-turned-new-again) ingredient to deliver “younger”, “fresher”, “smoother”, “radiant”, and basically anything else related to transformed appearance to that of the perception of youth and beauty. It has got to the point where it is hard to believe in this industry where exactly science stops and marketing and branding begins.

Does it really always just come down to the Benjamins? And will consumers “buy” the branding or will J. Hopkins see a diminished brand result? (If so, where can a diminished brand go for funding then?)

Is this brand innovation or brand dilution? Your mirror may be the only relevant indicator.

Further reading:
You can read the details and the debate in Rhonda Rundle’s WSJ article from Wednesday’s edition [Subscription required].

You can find out more about Cosmedicine at Sephora online.

Marketing Sherpa has recently awarded the top 12 viral marketing campaigns. I applaud them for awarding campaigns where performance metrics are a key factor.

Per my paper published in the Journal of Consumer Behavior’s titled “Buzz Marketing: Building the Buzz in the Hive Mind” I take issue with the term viral marketing. The much preferred and more accurate term is “buzz marketing.”

To better understand the machinations behind the campaigns I have assessed these buzz marketing campaigns and categorized them into various buckets based on promotion vehicle and market served (B2B or B2C). Of the various campaigns categories the type utilized the most frequently was a tie between “games” and “entertainment”. These methods were only applied to consumer markets.

Information of a “how to” nature was used in the B2B markets whereas, semi-exclusive information was offered in B2C markets in the form of new-to-the-world music and unreleased films.

Advocacy marketing, which is marketing for a social cause, was used in a campaign that crossed both B2C and B2B markets. And unique offer value, in the form of a belt buckle knife, was also promoted to both markets.

The campaign that impressed me as the most innovative and humorous is the Monk-e-email, a campaign from Careerbuilder. This campaign makes novel use of customized audio (text-to-speech, phone recorded, or computer mic recorded) to send messages. It caused quite a stir amongst the friends I directed it towards. It is definitely buzz worthy.

Below is a table that shows the campaign classifications.

The Buzz Campaign List
1. Peerflix Paparazzi
2. Beer.com's Virtual Bartender
3. New Rules of PR (PDF)
4. Wadsworth Atheneum - Surrealist Exhibit
5. The Quantum IT Challenge
6. MakeMyTrip Viral Series (India)
7. Blog in Space
8. Kreedo Brand Democracy
9. Monk-e-Mail
10. mySBC eBill Service: Trees in the Forest of Change
11. Belt Buckle Knife
12. The ERP of This Century

Related links
- MarketingSherpa's Viral Marketing Hall of Fame 2006: Top 12 Campaigns You Should Swipe Ideas From

- Monk-E-mail

Good People Co. LTD, a South Korean manufacturer of clothing sponsors a “pajama day” where all the employees are required to wear sleepwear which allows them to innovate on the brand experience. In the photo, what looks quite whimsical could actually be a leg up on the competition.

Methods like “Staple yourself to the customer” “customer case analysis” “customer led innovation” are all ways of wiring your company into customer needs. However, one key thing to note is these methods are often those of incremental innovation rather than radical innovation. CMO’s that lead the market initiate projects that embody both types of innovation.

Website:
Good People Co. LTD.

Internal brand communication is critically important in ensuring excellence in brand delivery. It provides the ultimate course for guiding employee decisions and actions. It is particularly important in customer service environments, whether it is pre-sales, sales, or post-sales. Singapore Airlines is well known for its customer service and that service embodies the core of the experience of flying on Singapore Airlines and its service excellence is touted in its advertising. The company takes great care to ensure the consistency of its customer experience and requires extensive ongoing training for its flight staff and crew.

In this age of computers one method to activate internal branding is to utilize computer games as a training tool. The mention of computer games brings to mind titles like Grand Theft Auto, Super Mario, and Civilization all of which are hardly suited for brand training. However there is another genre of games that provide an example of how games are suited towards training. One example is Diner Dash 2. Diner Dash 2 is a game that has been played more than 100 million times and is in the top 20 on MSN games.

In Diner Dash the player is working in a restaurant and “takes on her character as she races to seat customers, take their orders, serve food, bus up the tables and, of course, pick up the check. The player earns points for getting the job done and is rewarded by getting to upgrade the restaurant, like hiring a mime to entertain customers.” With a little imagination you could see how a game like this could be modified for use in training people at Starbucks, Holiday Inn, McDonalds, and the like.

Computer games can simulate real life events with the benefit of eliminating the risks of on-the-job training where repercussions can involve customer defections. Simulations have value and that is exactly why the military uses battle games and the police use training games. Its time leading service brands embrace games as a supplemental tool to ensure quality in brand delivery. Even a firm, like Singapore Airlines, which already has an extensive brand training program, could make use of computer simulations to help maintain its leadership in brand delivery.

Web Link:
Diner Dash at Yahoo Games

Source:
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/03/27/BUGATHTT051.DTL

What brands from the Philippines are well-known globally? San Miguel beer is a global brand from the land of pinoys, although many people think it comes from Spain. That is pretty much where the list stops, however Jollibee is an upcoming contender as a global brand and cultural ambassador from the Philippines. Jollibee is a fast food restaurant and also the name of its mascot which is a big bee in a chef’s hat.

Jollibee dominates the Philippine fast food market, where it currently has 1079 stores. It also has 121 stores in other countries including US, Vietnam, Indonesia and Brunei. It started in 1978 as an ice cream parlor and has since expanded its menu to serve hamburgers, spaghetti, hotdogs, chicken, palabok, burgersteaks, and fries.

McDonalds entered the Philippine market in 1981 and many assumed the Big Mac would soon dominate the market. Surprisingly, McD’s ended up getting stung by the bee. Jollibee has secured a 65% market share and is out pacing McDonalds at its own game. Jollibee accomplished this by local adaptation of the menu and by positioning the food chain as a family restaurant. Jollibee attributes this success in part to its internal branding which focuses on "great taste and happiness" which includes "value for money, the happiest store experience, and the haven for kids.”

Where was the first Jollibee in the United States? It is situated right in Daly City California, a city located just south of San Francisco. This was a particularly wise location to choose as Daly City is jam-packed with Filipinos who naturally head to Jollibee anytime they are struck with nostalgia for the Philippines.

Jollibee now faces a conundrum. Filipinos like their burgers sweet and juicy, spaghetti that makes Ragu look sugarless, fatty pork served with pork cracklings, and mango deserts. These dishes might satisfy cravings for the pinoy community, but if it wants to expand in the US beyond its current half dozen stores it will have to beat McD’s on its own turf by creatively modifying its offer.

Jollibee already slightly modifies its menu with its Jollimeal, a rice dish where the topping is tailored to local markets. Nonetheless, it seems a better and easier route for it to pursue expansion through other brands. This is a strategy it is driving towards with its house of brands that include Greenwich Pizza, Delifrance (French Bakery), Chowking (Chinese), and Red Ribbon Bakeshop.

Goldilocks, a Philippine bakery and restaurant that does $50 MM business in the US, seems better poised for US expansion than Jollibee. Goldilocks’ bakery and cafeteria combo keeps it from directly competing with the fast food giants and its wider menu allows it to introduce a greater variety of cross-over foods. However, rather than targeting the average Americans, it seems Goldilocks is better suited to attracting other Asians, like Chinese and Koreans, as it’s bakery style of cakes and sweet breads better cater to their palate. This could be a worthwhile niche market as its stores are based in California in neighborhoods with a sizable Asian population. And focusing on this niche market is less risky than challenging in the competitive fast food business that Jollibee faces if it mainstreams against McDs.

Take Aways
Local brands: Brands in local market are strong contenders and are not to be underestimated. Local managed brands often have the advantage of intimate knowledge of consumer tastes and consumer preference through local pride.

Dominant brands: Dominant brands from mature markets do not always dominate when entering foreign markets. Local tastes often differ and it would be wise to partner with local experts to modify the brand offerings so it is better tailored to local affinities.

Beach head strategy: Emerging market brands can easily establish a beach head in foreign countries by targeting areas with a high immigrant population. However, to sustain success in foreign markets a beach head strategy needs to be followed up with a successive change in strategy to enable the brand to go mainstream. Some brands have an easier path to succession as their expansion strategy may place it in an uncontested market, where as other succession strategies place the contender in highly competitive markets where entry might not be too attractive.

Brand Architecture: A house of brands strategy is inherently less efficient than a branded house. Yet, pursuing a house of brands strategy may be the only real option when faced with modifying your entry in local markets where your strategy would have to be completely different and therefore would not reflect the strengths and meanings of the original brand, and would possibly even dilute the original brand in its home market.

Related Websites
- Jollibee website
- Goldilocks web

Sources:
Jollibee corporate documents.

- Continental Cuisine, Dipayan Baishya. Knight Ridder Tribune Business News. Washington: Aug 17, 2005. p. 1

- Give Me Your Tired, Your Poor, Your Beloved Products. By: Esfahani, Elizabeth. Business 2.0, Oct2005, Vol. 6 Issue 9, p29-30, 2p, 1 chart, 1c; (AN 19319805)

- Jollibee. By: Sudhaman, Arun. Media Asia, 12/17/2004 Supp Asia's Top, p34-35, 2p, 4c, 4bw; (AN 17164063)

- A busy bee in the hamburger hive. Economist, 3/2/2002, Vol. 362 Issue 8262, p62-62, 1p, 1 chart, 1 graph, 1bw; (AN 6266544)

- US Census, Texas Becomes Nation’s Newest “Majority-Minority” State, Census Bureau Announces (Accessed 3/22/2006) Site

Movie theater attendance has fallen for three years in a row. According to the Motion Picture Association, domestic theater attendance fell 9% last year to 1.4 billion tickets sold, which is down from 1.64 billion sold in 2002. That situation is not quite as blissful as the “sound of music” to the ears of movie execs.

So what do you do if you’re a movie exec? How do you rebuild the buzz?

Well, coffee certainly provides a buzz, and Starbucks has “star” and “bucks” in its name which are two things a movie exec has to like. With a grande cappuccino priced at about $3.46 the people who frequent Starbucks must have discretionary cash to burn. And since people need discretionary cash to see movies which are priced at $10 a pop (when DVDs can be rented for $3) that makes Starbucks customers quite attractive to someone who sells movies.

Lions Gate Entertainment, a smaller Hollywood studio, inked a deal with Starbucks where the coffee behemoth will be marketing its upcoming film "Akeelah and the Bee"

How the Coffee Chain Will Promote Films
 Offer movie trivia on a chalk board
 Feature words from the film inside the pastry display case
 Sell DVDs
 Ads on Coffee-Cup Sleeves
 Show trailers over its WIFI network

Starbucks needs to be careful in choosing what movies to promote. "Akeelah and the Bee" is about a child with a passion for spelling bees. This seems innocuous enough, but Lions Gate Entertainment also makes slasher flicks like “Saw”. When you create an alliance you are effectively co-branding so if people associate Lions Gate with slasher films, and see Starbucks is promoting films from that studio it could impact the coffee giant’s brand negatively, especially since Starbucks takes great care to promote a social mission in its charter. Brand incongruity can be a brand killer.

As a mere promoter Starbucks might not have an impact on the overall movie going audience. Nielsen Analytics found that high ticket prices and bad movies are the top reasons people are going to fewer films. And 36% are avoiding the theaters because of high concession prices. Concessions are the lifeblood of theaters as they only keep half the box-office receipts. The rest of their profits come from the concessions, where profit margins can top 85%. However, it seems Starbucks has high hopes to improve the quality of the movies, as it has indicated it might tackle movie production. And since its customers are already used to paying high fees for convenient food the movie theater owners might find the Starbucks crowd a profitable one.

Sources:
- Horn, John, “Now Showing: Declining Sales at Theater Snack Bars,” Los Angeles Times, March 16, 2006

- Gray, Steven and Kate Kelly “Starbucks Plans to Make Debut in Movie Business”, Wall Street Journal, 12 January 2006

The blog's goal will be to start conversations around a few topics of interest to ZIBS:

- Branding History
- Benefits of Branding
- Brand Strategy
- Resource Allocation
- Brand Lifecycle Management
- Marketing Programs
- Operations Management and Branding
- Brand Strength Assessment
- Brand Performance
- Brand Valuation
- Business to Consumer Branding
- Business to Business Branding
- Technology Branding
- Services Branding
- Branding Case Studies
- Branding Best/Worst Practices
- Private Label Competition
- Branding Commodities
- Branding in Emerging Markets
- Branding Retail Organizations

We invite you to participate, to contribute - ideas, suggestion, comments and insights. Join us in our learning journey...

We've been thinking about doing this for some time now, prodded by Greg, Christian and you, our visitors.