As a Chinese social network created by Bytedance in 2017, TikTok enables its users to produce, publish and watch short music videos. Its primary target audiences are young people under 24 years old. Moreover, it has been increasingly popular around the world, including the United States, Japan, Thailand, German and France et al. There are over 500 million users of this app globally per month. In other words, TikTok has noticeably become a significant channel for marketers to reach consumers. However, different from other platforms with traditional ads, the marketing on TikTok is new and closely related to content.
For instance, there are mainly two approaches to raise brand awareness. On the one hand, it is common for brands to cooperate with influencers on TikTok. These influencers tend to be those who attract numerous followers by posting funny and impressive videos. In this way, their followers would establish an emotional connection with them and further trust their recommendations. In China, well-known influencers, such as Jiaqi Li who is really dramatic and good at selling lipstick products, have a profound impact on consumers and motivate them to purchase specific goods. As a result, it makes sense that brands would like to invite these influencers to endorse their products on TikTok and make more young audiences exposed to the brand in this way.
On the other hand, brands may make efforts to produce great original content and short funny videos to appeal to their target audiences. This requires both their creativity and ability to make a close connection between content and the brand. Nevertheless, compared with the grass-root influencers, the official account of a brand may find it harder to convince audiences by posting creative videos that are easily considered as advertisements.
Under this circumstance, nowadays more marketers are inclined to adopt content marketing strategies on TikTok in partnership with influencers. The brand or product is promoted in an implicit way as the influencers may pretend to use it in real life and share it naturally to their followers. But with the prevalence of such strategies, it seems that consumers become growingly aware of the business intention of influencers and arguably decrease trust in them. Accordingly, I wonder how effective this new marketing on TikTok will be in the future and which strategy may be further developed to replace the existed one. Overall, marketers need to make more efforts to take good advantage of TikTok as an essential platform to talk to Gen-Z and Millennials in the long run.
Zac Posen rose to fame after his design for the famous supermodel Naomi Campbell. After that, he expanded his connections with many celebrities. His design for the model Liu Wen and the actress Claire Danes at Met Gala put him under a lot of spotlight. He won many awards. He made himself to the New York Fashion Week. His niche was described as “very glamorous clothes for his very glamorous friends”. However, there seemed to be something missing.
The shut down of Zac Posen’s company is not rare. Another designer Derek Lam who founded his business in 2002 decided to close his high-end line. Many of these talented young designers who used to focus on high-end products have chosen to shift to other lines or to close their whole business. Large luxury groups might be the reason behind this. The management problem of the company could be another. However, there is more.
The culture for people to purchase has changed. In the past, the recommendation of magazines like Vogue and celebrities on the red carpet could lead to a huge rise in the purchase of a certain product. However, the rule has changed. Glamor is not what the current customers pursue. On the contrary, companies like Supreme are the brands that speak more to customers. They use their own media channels, have different stories, and build their own communities. For luxury brands like Zac Posen, how to write their own stories is a problem should be addressed.
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A Patagonia advertisement urging consumers to NOT buy their products on Black Friday as part of their Common Threads Initiative to decrease the negative environmental effects of extreme consumerism.
With the meteoric rise of cause marketing and corporate social responsibility, companies everywhere are jumping on the trend to stay current and boost sales amongst Gen-Zers and Millenials. 76% of Gen-Zers have purchased or would purchase from a brand that supports their beliefs and 67% would boycott a brand or consider boycotting a brand that stood against their beliefs (Forbes).
Brands are catching onto this trend quickly. With the expectation that brands should stand for something – or at the very least not stand for the wrong thing – the question becomes whether these cause marketing tactics should be regulated. If a company publicly claims they are doing immense good in advertisements, should laws be in place to ensure companies cannot lie or inflate their social impact? How would that be measured?
Whirlpool website showcasing their new CSR campaign to wash clothes for students so that they can go to school (2019).
In a recent Whirlpool advertisement, the brand informs consumers that “thousands of kids miss school because they don’t have access to clean clothes.” The ad goes on to announce that Whirlpool is solving this laundry-absenteeism problem by installing Whirlpool washers and dryers in schools. While this is a noble pursuit, at first pass, this advertisement feels slightly inauthentic. As a washer-dryer company, Whirlpool is grasping at straws to see how they can jump into the CSR and cause marketing trend. Even if this advertisement at first seems like a reach – it raises another question of whether companies should be encouraged to grasp at straws to fit into the CSR space. At the end of the day, a portion of students are getting access to clean clothes when they couldn’t before.
Cause Marketing Gone Wrong: Backlash against a Pepsi advertisement featuring Kendall Jenner solving police brutality with a Pepsi. Source: TheDrum.com
Companies should be encouraged to help in any way they can and it’s a prosocial movement for Gen-Zers to demand social impact from their favorite brands. However, this still begs the question of how cause marketing and CSR efforts should be regulated. If everyone is doing it, should there be state or federal laws placed on advertisers to ensure the initiatives are authentic and truthful? For example, India requires all companies to donate 2% of their profits to charitable causes (Chhabra, 2014). This sort of regulation ensures that all companies claiming CSR social impact are authentically doing so since it is mandated by law. As for the United States, there is no federal law governing cause marketing or CSR. However, about 20 states have something called a Commercial Co-Venturer which requires a contract between the company and the nonprofit it claims to help. While this kind of law is a start, what is the future of CSR and cause marketing? Should the U.S. require large corporations to donate a portion of their profits? If not, should companies at least be held responsible for their claims made in advertising? Perhaps a tool could be introduced for marketers and advertisers that measures their claims. With the CSR and cause marketing trend booming, it’s unclear what the future of this field will hold and how laws and policies will respond.
Launched in 2004 in London, Dover Street Market (DSM) has gained its popularity worldwide. It is well-known that DSM is labeled as avant-garde and fashionable. This is the first time for the concept store to open a new one which contains not only perfumes but also make-up products. “From avant-garde independent young labels to the most established and classic references, it’s going to be an explosion of scents, sounds and textures”. The brands of parfums will include Comme de Garçons and Gucci, the cosmetic brands will include Byredo, MAC and Thom Browne.
The reason why this concept store could become so successful goes to its choice of parfums and make-ups. For most customers, it might be not affordable to buy a shirt in luxury brand, however, they could choose to buy a parfum to get closer to brand culture. According to Cosmetics Business, in 2018, the total amount of sales has reached 50 million dollars in global parfum market. The issuer of Fragrance of the World told that certain costumers had the preference for niche and hand-made fragrance brand. DSPM is the store that offers niche choices for customers who wanted to try something different.
The parfum market is tightly related to the cosmetics market. The two kinds of products have the sameness that they make costumers feel closer to those high-end brands. Especially the cosmetic products, whose sales are really in need of great visual experience. With the simple design and niche labels, DSPM has the very edge to invite customers to enjoy their purchases. The diversified choices of products in DSPM provide customers with a one-of-a-kind purchase experience.
It is undeniable that the advancement of parfums and cosmetics may have the collision with the development of clothing brand, but the former two products are being the core of luxury brand to attract more and more customers. Knowing from the trend, luxury brands have embraced the profits of the product line of parfums and cosmetics, and they are trying to cater to the picky taste of the audience, like producing niche parfums. DSPM is more like a product of the marketing trend, to some extent, it predicts the future development of the whole luxury market.
“Lying in bed, opening YouTube, browsing my subscribers’ videos, I found more than half of a subscriber’s videos contain advertising placement. It merely triggered my boredom of this brand and also this YouTuber.”
Picture 1: Advertising Placement on Facebook
That was an answer from my focus group several weeks ago, the topic of which was “How do you perceive online marketing during your experience on different social media platforms.” Four participants in the focus group all agreed that they hated the advertising placement in social media, no matter in what forms, such as product recommendations in a vlog, recommendations made by YouTube, or obvious collaborations with brands.
Picture 2: The benefit of advertising placement
We used to think that advertising placement through online platforms would limit the budget, pinpoint consumers, and convey messages to the target effectively. But with time going by, people are more and more aware of advertising placement in any form, therefore, making them more sensitive to the advertisement. Moreover, once a brand leaves the impression of over marketing on consumers, it’s hard to change the brand image. For example, three or four years ago, Yves Saint Laurent Cosmetic developed a set of intensive advertising on the Chinese market, including a great many of influencers’ recommendations, pop-ups through social media platforms, and too many reviews stating the best quality and package of its lipsticks on e-commerce platforms. This set of marketing seemed to boost sales and improve brand awareness among consumers, however, a bundle of fake products came because of the great upsurge in purchasing Yves Saint Laurent lipsticks. Consequently, it triggered consumers’ antipathy against Yves Saint Laurent, cheapening its brand value.
Besides the example, we could tell people’s antipathy against over marketing from many aspects. Specifically, invasive pop-ups on the Internet; bad shopping experience: consumers hate that they are surrounded by so many shopping guides; the sickness of the same brand recommendation keeping showing. These kinds of advertising do make consumers impressive about the brand, but ironically, the worst impression of being anywhere.
However, this kind of marketing strategy seems to be useful to some degree, especially when a new brand comes out and tries to make a strong impression in a short period. For example, around 2017 and 2018, lots of Chinese cosmetic brands such as Judydoll, Perfect Diary, and Hedone started to intensively advertise through different social media forms including Weibo, Wechat, Bilibili, and Little Red Book. All of a sudden, they “invaded” into every influencer’s video. Though there were some critics about their over marketing on social media, they still succeeded in improving brand awareness in a short period and boosting sales.
Picture 3 Perfect Diary’s advertisement on Bilibili
Therefore, it seems hard for brands to make a balance between gaining awareness and avoiding overmarketing. With consumers’ growing awareness of advertisements, brands need to find an unobtrusive way to advertise without triggering antipathy. And by doing so, brands can gain a good reputation and keep a high brand value in the long run.
“The Advertising Industry Has a Problem: People Hate Ads,” wrote last week Tiffany Hsu, from New York Times. The journalist cited a report where many people from the advertising industry talked about the challenges they are facing. It’s like a paradox: nowadays marketers have plenty of consumers’ data, they even can follow live discussions on social media (for free!) but apparently that is not good enough…users don’t like ads (me neither!) and that is a big problem. While people are paying for premium accounts to avoid ads, what marketers can do? What is next for advertising industry?
Just some ideas come to my mind. First, I hate ads when I’m watching a video in YouTube. Why? Because they are too long! I don’t want to listen a whole testimony from someone when I’m trying to watch my favorite TV show! But if I something catch my attention in 5 seconds, I’ll probably search for more information later in Google…not in YouTube.
Second, I hate when search for a flight to Miami in Google, book a hotel in New York or purchase a Halloween custom on Amazon and then I started to receive ads about flights to Miami, New York and Halloween!! I already made my purchases!! I don’t want another Halloween custom… Thus, my conclusion here is that at the same time new platforms gave an opportunity to marketers in terms of data analytics, that is also irritating users and leading them to pay to avoid ads. The industry needs to learn and do better.
What are your ideas to help marketers in this new digital landscape? What do you hate in the digital world? Let’s think! Here is the article from NYT.
The Advertising Industry Has a Problem: People Hate Ads
In the predigital days, advertising agencies were ruled by swaggering creative directors who gorged on lavish client contracts and sometimes created campaigns that set the cultural agenda and captivated the public.
Nearly every piece of that equation has changed. Agencies
are better informed than ever before about consumers, having amassed huge
stores of their data. But many of those consumers, especially the affluent
young people prized by advertisers, hate ads so much that they are paying to
avoid them.
At the same time, companies that hire ad agencies are
demanding more from marketing campaigns — while paying less for them.
As a result, the advertising industry faces an “existential
need for change,” according to a blunt report published on Monday by the
research firm Forrester. Now the agencies must “disassemble what remains of
their outmoded model” or risk “falling further into irrelevance,” the report
concludes.
“It’s harder to reach audiences, the cost of marketing is
going up, the number of channels has exponentially proliferated and the cost to
cover all of those channels has proliferated,” Jay Pattisall, the lead author
of the report, said in an interview. “It’s a continual pressure for marketers —
we’re no longer just creating advertising campaigns three or four times a year
and running them across a few networks and print.”
As advertisers bombard consumers across platforms like
Twitch, Facebook, television, billboards and more, consumers are trying to get
away, signing up for ad blockers and subscription services.
“People hate advertising,” said Joanna Coles, the former
chief content officer of Hearst Magazines, during a session at the Advertising
Week conference last month in New York. “And it’s all advertisers’ fault.”
Seated next to her, nodding in agreement, was Marc
Pritchard, the chief brand officer at Procter & Gamble, one of the largest
advertisers in the world. Ads, he said, are often irrelevant and sometimes
“just silly, ridiculous or stupid.”
“We tried to change the advertising ecosystem by doing more
ads, and all that did was create more noise,” he said.
The industry, over all, is also struggling to adapt as
Google and Facebook reshape ad delivery and Netflix stokes appetites for
ad-free entertainment, according to a separate report also released on Monday
by GroupM, the media buying arm of the ad giant WPP.
The result is “dangerous days for advertisers,” according to
the report.
“With shifts in viewing habits, commercial impressions in
the most viewable, highest-attention media are in free fall across the world,”
researchers wrote. “The problem is universal, and if the viewing behavior of
younger audiences is a harbinger, things are not going to get better.”
Some start-ups have begun rewarding or compensating
consumers to look at ads. But to effectively reach viewers, advertisers must
also “incorporate data-driven, tech-fueled approaches and platforms into the
creative process and tool kit,” according to the Forrester report.
That includes automation and machine learning technologies,
which Forrester expects will transform 80 percent of agency jobs by 2030. In
July, JPMorgan Chase announced a deal with the ad tech company Persado that
would use artificial intelligence to write marketing copy.
Advertising has become a “very complex, sprawling
marketplace,” with agencies grouped under large holding companies like
Interpublic Group, Publicis Groupe and WPP, Mr. Pattisall said.
To stay nimble, the holding companies must centralize their
operations, even if it means “the disappearance of some pretty storied, iconic
advertising brands,” Mr. Pattisall said.
Last year, WPP merged Young & Rubicam, a creative agency cited in “Mad Men,” with its digital ad business VML. Soon after, WPP combined J. Walter Thompson, which was founded in the 1800s, with the digital agency Wunderman.
The consolidation will bolster agencies as clients scale
back their budgets, according to the Forrester report.
Steven Moy, the chief executive of the Barbarian agency,
said that multiyear contracts had shortened, with budgets tightening and
performance metrics becoming more stringent.
“I haven’t seen a lot of multimillion-dollar, blue-sky,
five-year projects happening — it’s more like, ‘can you deliver something in
six months?’” he said.
Global spending is expected to grow at slower rates this
year and next year compared with 2018, weighed down by signs of a weakening
economy and rising geopolitical tensions, according to data released Thursday
from the WARC research group.
For the first time ever next year, Facebook, Google, YouTube
and other online platforms are expected to soak up the majority of advertising
dollars, according to WARC.
Advertising giants are facing competition for clients from
consulting companies such as Deloitte and Accenture, while independent agencies
such as Wieden & Kennedy New York have beaten out legacy advertising
companies for major accounts such as McDonald’s.
Some advertisers, like Unilever and Bayer, are pulling
business away from agencies and handling some of the work internally. Last
year, 78 percent of members of the Association of National Advertisers had an
in-house agency, up from 58 percent in 2013 and 42 percent in 2008.
Smaller agencies, such as Cutwater in San Francisco, are
feeling the pressure. But Chuck McBride, Cutwater’s founder, said that changes
in the industry would allow companies to express their creativity as they
experiment with increasingly personalized advertising.
“The gloom and doom is greatly exaggerated,” he said.
“Things are really messed up, but there’s opportunity in this.”
In the predigital days, advertising agencies were ruled by swaggering creative directors who gorged on lavish client contracts and sometimes created campaigns that set the cultural agenda and captivated the public.
Nearly every piece of that equation has changed. Agencies
are better informed than ever before about consumers, having amassed huge
stores of their data. But many of those consumers, especially the affluent
young people prized by advertisers, hate ads so much that they are paying to
avoid them.
At the same time, companies that hire ad agencies are
demanding more from marketing campaigns — while paying less for them.
As a result, the advertising industry faces an “existential
need for change,” according to a blunt report published on Monday by the
research firm Forrester. Now the agencies must “disassemble what remains of
their outmoded model” or risk “falling further into irrelevance,” the report
concludes.
“It’s harder to reach audiences, the cost of marketing is
going up, the number of channels has exponentially proliferated and the cost to
cover all of those channels has proliferated,” Jay Pattisall, the lead author
of the report, said in an interview. “It’s a continual pressure for marketers —
we’re no longer just creating advertising campaigns three or four times a year
and running them across a few networks and print.”
As advertisers bombard consumers across platforms like
Twitch, Facebook, television, billboards and more, consumers are trying to get
away, signing up for ad blockers and subscription services.
“People hate advertising,” said Joanna Coles, the former
chief content officer of Hearst Magazines, during a session at the Advertising
Week conference last month in New York. “And it’s all advertisers’ fault.”
Seated next to her, nodding in agreement, was Marc
Pritchard, the chief brand officer at Procter & Gamble, one of the largest
advertisers in the world. Ads, he said, are often irrelevant and sometimes
“just silly, ridiculous or stupid.”
“We tried to change the advertising ecosystem by doing more
ads, and all that did was create more noise,” he said.
The industry, over all, is also struggling to adapt as
Google and Facebook reshape ad delivery and Netflix stokes appetites for
ad-free entertainment, according to a separate report also released on Monday
by GroupM, the media buying arm of the ad giant WPP.
The result is “dangerous days for advertisers,” according to
the report.
“With shifts in viewing habits, commercial impressions in
the most viewable, highest-attention media are in free fall across the world,”
researchers wrote. “The problem is universal, and if the viewing behavior of
younger audiences is a harbinger, things are not going to get better.”
Some start-ups have begun rewarding or compensating consumers to look at ads. But to effectively reach viewers, advertisers must also “incorporate data-driven, tech-fueled approaches and platforms into the creative process and tool kit,” according to the Forrester report.
That includes automation and machine learning technologies,
which Forrester expects will transform 80 percent of agency jobs by 2030. In
July, JPMorgan Chase announced a deal with the ad tech company Persado that
would use artificial intelligence to write marketing copy.
Advertising has become a “very complex, sprawling
marketplace,” with agencies grouped under large holding companies like
Interpublic Group, Publicis Groupe and WPP, Mr. Pattisall said.
To stay nimble, the holding companies must centralize their
operations, even if it means “the disappearance of some pretty storied, iconic
advertising brands,” Mr. Pattisall said.
Last year, WPP merged Young & Rubicam, a creative agency
cited in “Mad Men,” with its digital ad business VML. Soon after, WPP combined
J. Walter Thompson, which was founded in the 1800s, with the digital agency
Wunderman.
The consolidation will bolster agencies as clients scale
back their budgets, according to the Forrester report.
Steven Moy, the chief executive of the Barbarian agency,
said that multiyear contracts had shortened, with budgets tightening and
performance metrics becoming more stringent.
“I haven’t seen a lot of multimillion-dollar, blue-sky,
five-year projects happening — it’s more like, ‘can you deliver something in
six months?’” he said.
Global spending is expected to grow at slower rates this
year and next year compared with 2018, weighed down by signs of a weakening
economy and rising geopolitical tensions, according to data released Thursday
from the WARC research group.
For the first time ever next year, Facebook, Google, YouTube
and other online platforms are expected to soak up the majority of advertising
dollars, according to WARC.
Advertising giants are facing competition for clients from
consulting companies such as Deloitte and Accenture, while independent agencies
such as Wieden & Kennedy New York have beaten out legacy advertising
companies for major accounts such as McDonald’s.
Some advertisers, like Unilever and Bayer, are pulling
business away from agencies and handling some of the work internally. Last
year, 78 percent of members of the Association of National Advertisers had an
in-house agency, up from 58 percent in 2013 and 42 percent in 2008.
Smaller agencies, such as Cutwater in San Francisco, are
feeling the pressure. But Chuck McBride, Cutwater’s founder, said that changes
in the industry would allow companies to express their creativity as they
experiment with increasingly personalized advertising.
“The gloom and doom is greatly exaggerated,” he said. “Things are really messed up, but there’s opportunity in this.”
4 weeks ago, Netflix dropped their trailer for a new film directed by Michael Bay and starring Ryan Reynolds and many other famous actors called “6 Underground.” The trailer has sparked a lot of conversation in the entertainment industry amongst film studios, exhibitioners, and marketers. Since Netflix and streaming became very popular a couple of years ago, many in traditional Hollywood, particularly TV studios, have been competing directly with the platform for audiences. Now, there are many streaming platforms such as Amazon, Netflix, Hulu and many more soon to debut that not only stream many Hollywood films after they’ve left the box office but also are creating their own content. With film, content creation on these platforms has generally paled in comparison to Hollywood films. However, the “6 Underground” trailer shocked the industry, because the trailer’s production quality was very high. Therefore, the current mediascape where streaming is on the rise and content creation more easily accessible. This trend raises a new problem for Hollywood, and in particular Distribution and Exhibition sectors of the industry. Getting audiences to theaters has progressively gotten more and more difficult in recent years, especially with the rise of franchise films, the dominance of IP based films, and event opening weekends. The question becomes: how do film marketers advertise films and get audiences into the cinema while competing in this new mediascape?
Matt Weisbecker’s suggestions in this article do not give any specific ideas in terms of campaigns. His main points center around using data to studio marketer’s advantage. I agree that using data can vastly affect how movie marketing works. However, I think a lot of conversations around this topic could benefit from focusing not just on the Marketing side from the studio but also from the Exhibition side. Theaters have a lot of power in their own marketing and in their physical locations to influence audience’s experiences. I think that further integrating these two sides of the industry and focusing more on the theatre side of the problem, because the theater experience is what differentiates Hollywood from streaming.
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Many brands show their respect and support to minority communities like women, children, and LGBT. However, except for the introduction page on their official websites, how many of us can still remember their actions?
These brands surely did something significant with rich content. Content is also sure to be important in branding; however, the context has become the new god of marketing.
Ben & Jerry’s, a nationwide popular ice cream brand has shown its great support to the LGBT community at the right time and the right place, which can be seen as a perfect example of contextual marketing.
In Portland, a floral rainbow was installed in 2012 originally which was then torn down seven times by nationalists and opponents of LGBT rights, and finally removed in 2015.
However, the campaign “Rainbow’s return” was conducted by Ben & Jerry’s in 2018. Instead of reinstalling a floral rainbow there, Ben & Jerry’s rebuilt an “unbreakable” rainbow in the form of a water-light hologram. As this new rainbow was rebuilt at the exact place of the original one, Ben & Jerry’s shows its strong determination in supporting the LGBT community and strengthen the influence of this campaign.
This campaign has reached 47.5 million people on social media platforms and gained 355 thousand positive reactions on the Internet. Also, the influence is long-lasting as even today in China, people still offer positive feedbacks and present their strong purchase intention online as they are inspired by Ben & Jerry’s. Although in China, it is not easy to buy Ben & Jerry’s ice cream, the consumers spontaneously make a list of all Unilever products to encourage purchasing and show their respect to such an inclusive and responsible company.
It is not rare that many companies have presented their concerns on social issues and their commitment to equality. However, how to pass the brand’s abstract positive image to the consumers’ mind is tricky. Maybe the context is really the key to future success?
Many brands show their respect and support to minority communities like women, children, and LGBT. However, except for the introduction page on their official websites, how many of us can still remember their actions?
These brands surely did something significant with rich content. Content is also sure to be important in branding; however, the context has become the new god of marketing.
Ben & Jerry’s, a nationwide popular ice cream brand has shown its great support to the LGBT community at the right time and the right place, which can be seen as a perfect example of contextual marketing.
In Portland, a floral rainbow was installed in 2012 originally which was then torn down seven times by nationalists and opponents of LGBT rights, and finally removed in 2015.
However, the campaign “Rainbow’s return” was conducted by Ben & Jerry’s in 2018. Instead of reinstalling a floral rainbow there, Ben & Jerry’s rebuilt an “unbreakable” rainbow in the form of a water-light hologram. As this new rainbow was rebuilt at the exact place of the original one, Ben & Jerry’s shows its strong determination in supporting the LGBT community and strengthen the influence of this campaign.
This campaign has reached 47.5 million people on social media platforms and gained 355 thousand positive reactions on the Internet. Also, the influence is long-lasting as even today in China, people still offer positive feedbacks and present their strong purchase intention online as they are inspired by Ben & Jerry’s. Although in China, it is not easy to buy Ben & Jerry’s ice cream, the consumers spontaneously make a list of all Unilever products to encourage purchasing and show their respect to such an inclusive and responsible company.
It is not rare that many companies have presented their concerns on social issues and their commitment to equality. However, how to pass the brand’s abstract positive image to the consumers’ mind is tricky. Maybe the context is really the key to future success?
Below is a picture of
Mercedes-Benz’s GLA and Infinity’s QX30. Just by looking at the picture, how
much are you willing to pay for each of the car? Most of you are willing to pay
much more for the Mercedes, right? However, the Infinity QX30 is a model based
on Mercedes’s GLA, meaning that they share the same platform, same engine, and
even same materials used for the interior. Then why are you, the consumer,
willing to pay more for the Mercedes?
Interbrand, a subsidiary of Omnicom Group, has just released its best global brand rankings. In this list, brands are ranked in order of their brand value. According to Interbrand, brand value was calculated in a function of products or services’ financial performances under the brand, how much brands affected consumer’s purchasing decisions, and how well brands did in making customers loyal to them. However, I think when measuring a brand’s value, financial performance should not be counted.
On the list, the top four brands
are all technology makers, with Coca Cola comes at the fifth. This makes sense
because the top four brands on the list are also companies that reap hundreds
of billion revenue every year. Therefore, they performed extremely well on the
financial part of the function. However, when you take the logos off, the
products are highly likely to do well on the market. For example, if there is an
unknown search engine that can show searching result as accurate as Google
does, I am pretty sure that Google’s market share will be diluted. The competitive
advantage of these technology giants is not their brand names, but the
algorisms and ecosystems that they built. On the other hand, for consumer
package goods like Coca-Cola, its brand might be its competitive advantage.
There is relatively little difference among merchandises in the same category,
and consumers buy from the brand they are familiar with and loyal to most of
the time. The famous failure of Coca-Cola’s New Coke is a good example of this.
Before Coca-Cola introduced the New Coke, they tested whether people like the
taste, and results revealed that consumers like the tastes more than the
classic Coke. However, when the New Coke was finally introduced to market to
replace the classic Coke, consumers did not take it and asked for the classic
Coke back. This shows that people buy Coke not only for the taste, but also for
the brand. Thus, I think brands like Coke should be more valuable than brands
like Microsoft and Google.
On top of the lists are also many luxury brands. Comparing a diamond ring from Tiffany and Costco, they are exactly the same in functional value, but the ring from Tiffany might be thousands of dollars more expansive than that from Costco. This is because luxury brands endow their consumers with great psychological value, meaning that those who wearing Tiffanys feel better of themselves and are more likely to talk about their rings with friends.
Although many marketers indicated
that they did not care much about the ranking, it is always better to have
strong brand power or brand equity. Firstly, strong brand equity enables brands
to develop quickly and effortlessly. Consumers are more likely to recognize
brands that have strong brand equity and therefore, when these brands are
developing to a new market, consumers would go after them instead of these
brands spending a significant of their marketing budget to promote their
product or services to the consumers. Besides, strong brand equity allows
brands to charge a premium price comparing with others. As shown in the Mercedes
VS. Infinity case and Tiffany VS. Costco example, consumers’ willingness to pay
(WTP) for brands with strong brand equity is much higher than their WTP for an
ordinary brand. Therefore, brands with strong brand equity will have higher
gross margins and eventually better financial performances.
What brands do you think are
valuable and what are some other benefits brands with strong brand equity gain?
Also, how do you think brands should build their brand equity? Please share
your thoughts below. Thank you!
Since Rihanna confirmed that her make-up line is 100% cruelty-free, Fenty Beauty was in the absence of the Chinese cosmetic market for two years. However, two years after its launched in 2017, Fenty beauty officially landed in China via Tmall Global, Alibaba’s e-commerce site on September 3rd. Also, it expanded its retail distribution in Hong Kong, Macau at T Galleria by DFS, Sephora, Harvey Nichols, Beauty Bazaar, and Beauty Avenue and other parts of Asia.
Fenty Beauty in Tmall
In fact, two months ago, Fenty Beauty has already registered its official account on Weibo with its first online campaign, “New Generation of Beauty”. Collaborating with Chinese pop singers Wangju who has tan skin and slightly full-figured body shape, Fenty Beauty intended to challenge traditional Chinese definition of beauty, such as skinny and light skin. Likewise, it also registered the account on Little Red Book (RED), a popular social media and e-commerce platform in China.
“Fenty Face” Wang ju
However, unlike its great success in the U.S. market, Fenty Beauty didn’t make a big hit in the Chinese market. It only has less than 9000 followers on Little Red Book, and 55000 followers on Weibo. Several facts may negatively affect its performance on the Chinese market.
1. The expectation of cosmetic products
In the US, Fenty Beauty built a positive brand image by proclaiming that it’s an 100% cruelty-free brand. However, there is a different story in the Chinese market.
Even though the Chinese government still requires animal tests towards all the imported cosmetics mandatorily, few Chinese people are aware of cruelty-free cosmetic products. They are concerned more about whether cosmetics are natural, green, or organic due to the rising of environmental pollution issues, such as the haze. Cosmetics, which could improve their skin condition, are more attractive to them. Thus, Fenty Beauty’s “cruelty-free” brand image may have less influence on consumers’ decision making in the Chinese market.
Also, unlike the U.S., a multiracial country, Chinese consumers have lower requirements for a foundation with different tones. Overall, only a few foundation tones are required in this market because of the similar skin color of Chinese people. Thus, since one of the most significant strengths of Fenty Beauty is that it’s a line for different skin tone, skin type, age, and demographic, it could be weakened significantly due to the distinct demographic conditions in China.
2. Inappropriate Spokesman
As Rihanna proposed, “Make up is there for you to have fun with; It should never feel like a uniform. Feel free to take chances, and take risks, and dare to do something new or different.” Fenty beauty focused on promoting the diversity of beauty. However, the spokesman of Fenty Beauty in China, Eleanor Lee, has aroused the controversy on social media. Since Eleanor Lee’s style is more of Korean style and her appearance conform to Chinese conventional norms of attractiveness, she is not an ideal spokesman for delivering the Fenty Beauty’s brand identity. Also, unlike another spokesman of Fenty Beauty, Fan Chengcheng, the brother of Chinese celebrity Fan Bingbing, Eleanor Lee doesn’t have a large fan base in China. Thus, Fenty Beauty may need to consider more by choosing a spokesman in the global market.
