First Outsourcing To China…Now China’s Buying Us!

Chinese branding is like the young buck of multinational companies. It’s got its legs up kicking, but it’s not quite ready to go out on its own and fare in the wild. We all know about the struggles of Chinese domestic brands abroad. It’s been covered again and again and again as of late. To many it may seem like an easy problem to fix by putting any sort of effort at all into the branding and marketing process. What a lot of people don’t understand is that “culturally” (in an economic sense), Chinese companies don’t really see the point in branding.  So, first outsourcing To China, now China’s buying us.

The Chinese economy has a funky structure. You have these giant State-Owned Enterprises (SOEs) getting favorable bank loans and raking in a purported 43 percent of Chinese economy profits (according to official figures for 2011).  This brings to rise a common saying among China watchers: “for most SOEs, ‘branding’ means getting a new logo, ‘marketing’ means buying ads on China Central Television, and ‘P.R.’ stands for ‘pay the reporter’.” There’s just no incentive to do much more than that if you’re one of the big SOE conglomerates.

Notions of branding are a little different in China. Along with inexperience with the Western form of branding, a lot of Chinese companies feel that when it comes to their company name more is better. Just take the translation of one of China’s biggest mobile, phone and internet providers: “China Mobile Communications Group Corporation”. It’s a tad more of a mouthful than AT&T, don’t you think? For Chinese people, a company name like that sounds more official and respected. In a Western branding and marketing sense, it is way too long and runs the risk of being easily forgettable.

So what’s hot for Chinese investors? Buying American brands. The Boston Globe has aptly laid-out some numbers for just how much Chinese investment in American companies has increased since the dawn of the 00s:

Big-name brands like Volvo, ThinkPad, AMC Theaters and A123 (battery company) have been sold to Chinese owners. Now, the largest pork producer in the world, Smithfield Foods, is “at risk” of being acquired by a Chinese company. In light of this we can identify two major shifts in Chinese foreign investment trends. Not only are Chinese investors 1) focusing more on the American marketplace, they are also 2) targeting more “brand-dependent” companies than ever before. With reference to the second trend, Chinese foreign investment has been heavily resource based in the past, e.g., investing in oil in Africa. This kind of investment does work by itself and holds no major concern about imaging and marketing. However, in investing in American companies, there are major concerns over image. Smithfield is a perfect example of how a potential Chinese owner could ruin the image and brand of a company.

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It’s clear that Chinese companies tend to follow as opposed to lead. Rich Chinese investors have a lot of money and are finding their home country void of any worthy and lucrative investments. In comes the U.S. At this point it’s hard to gauge exactly how Chinese owners fare at the helm of American brands, because there’s just not enough history there. One thing that’s for sure is that investment will continue, not just in companies but in real estate as well. China and the U.S. also seem to be edging more and more towards more favorable investment policies for both sides. Should we be worried? Maybe. But keep in mind that a very similar trend arose with another certain Asian superpower with a booming economy not too long ago…

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A Teacher Who Makes $4 Million

Kim Ki-hoon is a teacher who has created a multi-million dollar hagwon empire for himself in South Korea.  He makes $4 million a year — as teacher.

The Wall Street Journal has an article published about the Korean educational system and the hagwons that parallel it.  Writer Amanda Ripley adapted the piece from her upcoming book “The Smartest Kids in the World—and How They Got That Way,” in which she follows the stories of three American high schoolers’ experiences spending a year studying in Finland, Poland and South Korean schools.

The most successfully paid athletes in America (and the world) are paid more for their brand then they are for the sport they play. It’s the Tiger Woods brand. The Roger Federer brand. The Kobe Bryant brand. Well, meet Ripley’s $4 million “teacher” – Kim Ki-Hoon – is also a brand. He gets the big bucks because his company is listed on the South Korean stock market.

The essential problem with the competitive afterschool, private shadow education system is that no matter how it originated, its main goal inevitably becomes profitability, not education. It’s comparable to the U.S. health system, where payment comes first and care comes next.  Don’t get me started.

The problem in both is that the “care” may not be that good, even after paying that much. In a system based on profits and in which “teachers are free agents”, there is no assurance of quality of education. When a parent signs their kid up to learn English – a language they may likely not know – what assurance do they have that it is good? Training schools must build a strong brand, one that demands higher prices than others.

Kim Ki-hoon is a machine.  He herds umm “teaches” hundreds of thousands of kids via online video – is not quite the same as what public school teachers do. Much of the training school industry (especially English training schools) in Eastern countries like South Korea are rotten businesses that put profitability above-all and treat students like cows – herding them through book exercises and tests.

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“Can the U.S. learn from this academic superpower?” Of course it can, although I like the idea of education for education’s sake as compared to asking how much (both mentally and monetarily) we can squeeze out of a kid. There are other things to consider: the psychological tolls on children, the effects of income-based education on society, and the increasing focus on technology sourced learning. Branding is not a new concept in education. U.S. universities do it all the time. It’s a question of how much we want our quality of education be decided by how it’s marketed to us.

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The Future of Drones: Cake Delivery

Incake, a Shanghai-based cake company, recently launched a new service where it transported baked goods using remote-control drones…

I had high hopes of sweet treats being flown directly to me.  But damn it, local aviation authorities expressed concerns that the service could be dangerous.  It really was a cool idea.  If the service resumes, interested parties will have to fork over the equivalent of $326 dollars.  Now that’s the future of cake delivery.

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This is certainly one way to gain attention for you brand when you’re in an already fairly crowded market of Chinese bakeries. According to The Telegraph, the company bought three Chinese drones and six rotor helicopters and outfitted them to deliver cakes to customers. Cakes have been flown five times via remote control to people willing to pay about 2,000 RMB (~325 USD) a pop. Further drone deliveries are put on hold until aviation authorities in Shanghai decide, well, what the heck to make of the situation. It’s possible that before Suzy gets her birthday cake, she’ll have to wait until a flight plan for her vanilla frosted with sprinkles clears with tower control.

Needless to say, it’s doubtful we’ll ever see this kind of marketing gimmick in the U.S., unless the bakery wants to be labeled as a “freedom-infringing deliverer of terrorist cakes”.  But go-figure, it seems as if the R&D team at Incake are all British (who probably just took the lead from this Domino’s UK marketing campaign).

Who knows – this could pave the way for inventions like catapulted cupcakes or ice cream scoop bombs. Those don’t sound half-bad, though they will never, ever beat the beer throwing fridge.

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Google Forces Advertisers to Go Mobile

Everyone knows the future will be spent looking down at our mobile devices.  Eventually, we will have to develop a second set of eyes at the top of our heads or face an evolutionary thinning of the herd.  Leave it to Google to force advertisers to go mobile.

What no one yet knows is whether anyone can make any money off our national addiction to phones and tablets.  Many have tried; few have succeeded.  Google might have as much at stake in figuring out how to monetize advertising as any mega-corporation on this planet, since we’re all Googling on our smart phones for sushi spots and trying read what bitcoins are all about instead of speaking to people anyway.  But even Google hasn’t quite been able to sway advertisers to tablets and mobile devices, at least in the numbers it wants.

Well, the 800-pound gorilla is through playing nice.  In July, Google changed its AdWords advertising policy to make advertising across all devices (laptop, mobile and tablet) the required norm.  Advertisers knew something was up when Google began tinkering with its AdWords policy as far back as February, but the other shoe has dropped and now Google’s full plans are revealed.  From now on, if you want to play with Google, you’ve got to make your ads accessible to the smart phone; no more buffet line ad campaigns, picking and choosing and customizing.

The move will produce some winners and losers, depending on how a company’s ad campaign has been tailored to this point.  Meanwhile, Google’s nominal rival, Bing, has piped up and said it won’t follow Google’s policy.  With Bing, advertisers won’t be forced to do anything they don’t want to do.

Sounds like a showdown to me.

 

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Women Let their Menstruation Flag Fly in New Ads

Umm, it’s okay to talk about menstruation now.  In fact, it’s hip and awesome.

Recently, two longform ad spots that have focused on menstruation have gone viral….not that viral…you know what I mean.  The tampon subscription service HelloFlo is getting lots of love for its hilarious longform “Camp Gyno” spot, and Bodyform completely destroys male squeamishness in its ad responding to a sarcastic Facebook post.

In “Camp Gyno”, a girl at summer camp who is the first to get her period becomes a Queen Bee of menstruation…that is, until someone discovers HelloFlo’s subscription service, and her reign of terror ends.  (There is something so terribly funny about watching a pre-teen girl terrorize other girls with menstruation tips.)

Meanwhile, Bodyform absolutely kills it with a response to a sarcastic Facebook post.  The post, by a male who apparently never wants to get laid again, whines that Bodyform deceived him all this time with its ads in saying that menstruation was fun and refreshing.  A cold and intense Bodyform CEO gives a chilling “you know the truth, now we’ll have to kill you” response, which must make the original poster feel about two inches small.  (Go with that metaphor where your mind takes you.)

We’ve come a long way since those awkward 80’s douche commercials featuring seaside talks between mothers and daughters.  Back then, finding a male willing to talk about menstruation was such a rarity that it made great comedy.  Now, males have got to accept that women’s bodies do things…intense things.

That, and they should apparently get used to being targeted by body-grooming products of their own, now, too.

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Hot Pockets Faces Mid-life Crisis

You know that feeling you get when you meet someone and they’re clearly acting like someone they’re not? You’re kind of just irritated and want to avoid seeing them again. Well, that’s the kind of feeling I get with Hot Pockets’ new re-branding campaign. Come on, Hot Pockets. I mean really, come on. When you now say that your meat is “premium”, that your cheese is “real”, and that your dough is “baked fresh daily”, you’re either taking humor advertising too far or you’re simply underestimating Millennials’ basic ability to reason. 1+1=2. Mix yellow and blue paint to make green. There are 12 inches in a foot. Hot Pockets are not good for you.

Just try watching the company’s new promo video without cringing like you just saw a guy still “bro-ing out” at a 30s+ cocktail party. I dare you to accept the believability of scenes from their new innovation kitchen (definitely not just a stage set-up for the promo) where it looks like chefs are preparing for the last Thanksgiving ever. I challenge you to take the dialogue between new Hot Pockets spokesman Jeff Mauro and Chef Vendôme (aka “The Big Sauce Boss”) at face-value (note that historically, having a chef with an “ô” in their name instead of just a regular “o” ensures a higher quality product). It’s baffling that Hot Pockets wants you to take a bite of their ambiguous goo-filled croissant you just microwaved for two minutes and think, “mmm, compliments to the chef!”

Sorry, Hot Pockets. Putting a wooden cutting board under your product doesn’t make it fresh. After 30 years as the go-to, lazy snack/dinner/“I hate myself”-meal, you’re going to have to do a lot more than just say your product is high-quality. 60 percent of Hot Pockets’ consumers are young adult males, so the company is probably worried that those guys will eventually get married and their wives will make them stop eating foods that burn the insides of their body with hot lava-like “cheese” (and help them avoid becoming this guy). Hot Pockets’ marketing director Daniel Jhung says that two-thirds of young males the company surveyed in New York City before re-branding “consider themselves foodies”, and the brand is trying to play to that change. God help the delusional “foodie” who still buys Hot Pockets. The equivalent would be the indie music snob whose guilty pleasure is Miley Cyrus.

Hot Pockets, we all love you. You’re the goofy, joke of a food that has been around for a while and whose ridiculous-ness is endearing. Was it not just last year that you told us to “Pocket Like It’s Hot”? Was it not you that helped define comedian Jim Gaffigan’s career? It’s sad to see you like this. Besides the continued use of this guy as your mascot, you’re living a lie – just like Jeff Mauro pretending that he is endorsing this product based on his sandwich expertise. Admittedly, you’re in a hard place. Millennials do want higher-quality foods, but you may be reaching a little too high here. We all know Hot Pockets are not fresh, oven-baked pizzas.

Nevertheless, a 30th birthday is a birthday, even if it is marred by the makeover of a mid-life crisis. Here’s to remembering your roots:

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Crocs, Inc.: Selling Ugly for Billions

Crocs are ugly. Soooo ugly. They are the quintessential, ugly, embarrassing “dad shoes” that make teenage daughters cringe and shadow their face with their hand, except this time everyone is cringing. It wouldn’t be surprising if years later we discover that Crocs was just a secret ploy by UGG to take the negative attention off of their brand. Why else would these clog-monsters be created?

Well, ugly is ugly, but as much as people claim to hate Crocs the company is squeaking its bulgy, awkward feet up in the market. Even with their signature bloated, plastic sock with holes raking-in 47 percent of revenue, the company is apparently becoming just as embarrassed as we are by their trademark footwear that they’re putting it in the back of their stores to make way for new styles and ramping-up product development. The result so far has been optimistic: $1.12 billion in sales last year and trading around $16 a share (up from a disastrous mark of less than $1 a share in 2008).

Part of the recent success is because to the brand’s expansion in the Asian market (41 percent of its 2012 sales was in the Asian pacific), specifically China, where the company estimates to generate over $100 million in revenue this year. Its other big Asian market is Japan and with 60 stores already opened in Thailand the company is setting sights high there as well. Unfortunately consumers in Asian markets are none-the-wiser to the American hatred of Crocs. More unfortunate is that they can’t develop the aesthetic realization on their own.

Without the benefit of a blank slate in the US, Crocs is trying to pull their colorful, goofy clogs up from holding the company underwater (albeit they are waterproof) and kick them off – that is, separate the brand name “Crocs” from the ugly shoe that everyone refers to as Crocs. In a bold yet necessary move for growth, the company is pushing its symbol of outdoor comfort and assured bachelorism to the backburner (can it just be pushed onto a burner instead?). For investors the question now is not of fashion but of whether or not to buy shares. For the company, the question now is not whether or not consumers will continue to think their signature model is ugly (they will), it’s whether or not they’ll think the new stuff is ugly too.

PS.  Have you seen these heinous Crocs loafers?

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British GDP Tied to Royal Baby Craze?

Hear that joyful and oddly dignified sound?  That’s the cash register of British marketers cashing in on the royal baby craze sweeping England.  And it’s not just royal-themed maternity and baby wear, either.  Krispy Kreme is selling “bite and reveal” doughnuts with pink and blue centers.  Marriott’s Grosvenor Hotel is charging $3500 a night for a luxury apartment designed by nursery outfitter Dragons of Wall Street.  And the legit bookmaker Paddy Power sent four terrifying-looking crowned babies to locales throughout London to make its presence known in the hot-and-heavy royal-name betting (“Diana” is the odds-on favorite, but does that include if it’s a boy? That would make life interesting).

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It’s no coincidence that the royal family is nicknamed “the firm” in England.  All other sectors of the British economy may be mired in a depression, but any product that can successfully tie itself to Great Britain’s obsession with the impending arrival can write its own ticket.  You would think the British had never seen a baby before.  Heck, tradition even allows marketers to poke fun with royal-themed barf bags for morning sickness, and those are selling well.  The British economy, stuck at 0.3 percent growth, could suffer a post-partum depression after the summer birth.

But the marketing gain of William and Kate comes with a cache loss for Prince Harry, who will be bumped to number four in the pecking order of royal secession.  Let’s hope he doesn’t get any Shakespearean ideas.

Now if only we could goose our economy with the recent birth of the first offspring for our own royal couple.  Do you think compass makers owe a debt of gratitude to Kim and Kayne?

 

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“Shitstorm” Hits the German Dictionary

There is something awesome about a profane and pirated English word becoming an official part of the German lexicon.  Duden, the German equivalent of the Oxford English Dictionary, has included into its newest edition the word “shitstorm”, after its use was popularized by German politicians and commentators during the recent Euro crisis. It is now officially part of the German Dictionary.

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After seeing the balance sheets of some of the member countries of the Eurozone, you might understand why the Germans would start muttering such a word under their breaths.  But actually, the English-appropriated word isn’t just pronounced differently, it also has a slightly different meaning.  Rather than referring to a situation that is untenably bad, the Germans use “shitstorm” to mean widespread and voracious outrage primarily found on online social media platforms.  German Chancellor Angela Merkel even felt comfortable letting the word fly at a press conference to describe online backlash to her Euro crisis management.

This just adds to the awesomeness of the German language.  On the one hand, it’s home to awesomely-long words, like “Donaudampfschifffahrtsgesellschaftskapitaenswitwe”, which literally means “widow of a Danube steamboat company captain”.   On the other, the Germans have gotten looser about copping English words whenever convenient, regardless of whether the usage translates correctly.  A great example is “a handy”, the popular phrase for a cell phone in Germany.  The phrase has a different NSFW meaning here.

Of course, we would never get fixated on a German word the same way.  Nope, not us.

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Ben and Jerry Crowdsources Flavors in Hip Cities by Howard Davidson

Ben and Jerry continues its tasty marketing reign of excellence with a new campaign that allows customers in target cities to crowdsource its newest limited-edition flavors.  In 360i’s first campaign for the ice cream company, the new flavors for each city will be determined by crowd behavior as much as voting on microsites.  As part of the “City Churned” campaign, New Yorkers taking cabs uptown will be voting for Peppermint while downtown cab fares will count as votes for Fairtrade Vanilla.  In Washington D.C., Red Line and Orange Line ridership and jogging lanes will count as votes for either Cherries or Fairtrade Bananas.  Seattlites will choose flavors by coffee sleeves, of course.  And Portland’s flavor decision between Marshmallows and Graham Crackers will be determined by facial hair styles…which seems somehow unsanitary.

There may be some risk, as you might have a few irate New Yorkers who will resent the brand for having them vote for Peppermint when really they’re just trying to take a cab home and they’ve always hated Peppermint.  (Think of how you’d feel if you were told you were voting for your least favorite food flavor.)  But really, it’s just another nice move by an ice cream company that can do no wrong when it comes to its branding.

Think about it.  Ben and Jerry’s shot to fame with a hippie ethos, yet its reputation survived being sold to mega-food corporation Unilever in 2000.  Many foodies may think of Unilever as the evil empire, yet a Google search of “Ben and Jerry’s” and “fake” will only turn up hilarious lists of fake flavors.  That’s because the company and its founders have been making all the right moves, from being risqué with a flavor name to capitalize on a SNL skit to mixing it up with the Occupy movement.  It appears as though 360i will be continuing the good work of the marketers that came before them, who turned a funky Vermont ice cream company into a golden goose.

 

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