Business Summaries

The Big Idea

Naomi Klein documents the history of the brand and the rise of multinational corporations to such power that they may be considered de facto global governments. Klein writes based on years of research, documenting the surrender of culture and education to marketing (No Space), reports on how choice is actually limited through predatory franchising, mergers, and corporate censorship (No Choice), how labor market trends are creating many self-employed, McJobs, part-time or temporary workers, and outsourcing (No Jobs).

“She anticipates a revolt against corporate power by younger people seeking brand-free space.”

From the Nike sweatshop scandal to the rise of global Goliaths like Starbucks, Shell, or Microsoft, our century has witnessed how a product is second only to its brand image. What clouds the images are the sad but true stories behind these giants, and their business practices. Many are organizing to reclaim brand-free space, to fight for the rights of those exploited by multinationals, and to find an alternative to the corporate rule.

INO SPACE

1. New Branded World

“The original notion of the brand was quality, but now brand is a stylistic badge of courage.”
– The late graphic designer Tibor Kalman

The Birth of the Brand
In the early days, neighborhood shopkeepers bought goods in bulk, and measured out the amount we needed to take home with us. Products were generic. Brandless. Then the pre-measured, packaged good came to the grocery store, with friendly familiar names and faces like Aunt Jemima, and that Quaker Oats guy.

Despite a dip in ad spending during the days of recession, today the brand is back and the term brand equity has never had so much value. In 1998 Philip Morris purchased Kraft for $12.6 billion, six times what the company was worth on paper. It was because the name Kraft meant so much to households everywhere, and the value of a brand could be translated into tangible, hard, cold cash.

This is the age of brand before product. Where marketing and lifestyle philosophizing comes first, and the production and quality second.

Absolut Vodka ads are always cleverly tailored to the readers of particular magazines. e.g. Absolut Centerfold for Playboy.
There are companies that have always understood the essence of the brand: Coke, Disney, McDonald’s and Burger King.
Starbucks and the Body Shop did not become giants through direct advertising. The retail outlet was their medium. Brand extensions, cultural sponsorships, political controversy, and the consumer experience were the ingredients of their branding success.
Advertising is about hawking a product. Branding is about corporate transcendence, and emotional attachment.
The concept comes before the commodity.
The modus operandi of many giant corporations is to use the cheapest possible labor and production method, then hype up image by creating a corporate mythology so powerful all it has to do is sign its name to produce all sorts of meanings for a consumer.
Advertising is now all about positioning, personality, character, and values.

2. The Brand Expands

The mid-eighties saw an increased number of people sporting logos on the outsides of their shirts. Go to any Nike outlet today, and there is not a single piece of merchandise being sold with the logo discreetly tucked into the back or inside of the item. From the La Coste alligator to the Nike Swoosh, the Ralph Lauren Polo horseman, to Calvin Klein, and the patriotic red, white, and blue Tommy Hilfiger.

Sure, sponsors have been around since the days when the Medicis supported Galileo. But if we were to trace where big game sponsorship began, that happened at the LA Olympic games in 1984.

The mid-nineties saw big brand logos sponsoring cultural events and soon, events were created by the brands themselves, with the act relegated as the backdrop to the brand. From art exhibits to rock concerts, the brand took over. IEG Sponsorship Report shows a 700% increase in US corporate sponsorship spending since 1985.

Corporations now upstaged the bands or the artists. The success of MTV as a brand is shown by our everyday use of the word.

Molson and Miller beer put up a Blind Date Concert Tour in 1996 where the audience would not know who was going to play until the last minute. This way, the band name would not have to be mentioned in publicity efforts, but Molson and Miller would take center stage. The beer became bigger than the band.

Brands today fight across categories for the consumers’ attention. Miller is not just up against Corona but Microsoft, Coke, and Nike as well.

Nike and the Branding of Sports

How to create a super-brand:

Create sports celebrities. Nike was the first to raise the status of athletes to otherworldly demigods. Sure, Babe Ruth and Muhammad Ali were great, but still accessible. Through clever marketing Nike created Michael Jordan the superstar. Nike is not known as a shoe company, but as a sports company. Its ads show different professional sportsmen playing sports other than their own specialization. Nike took Kenyan runners and made them ski in a big event. Sports and Nike is about transcendence. Michael Jordan became the greatest flying basketball hero with the aid of quick cutting, suspended animation and other editing tricks.

Destroy the competition. Nike tried to unseat sports agents by starting an agency of its own; not only to represent athletes in contract negotiation, but also to develop integrated marketing strategies for its clients that would be sure to complement Nike’s own branding strategy, often by pushing its own ad concepts on other companies.

Sell pieces of the brand as if it was the Berlin Wall. Kids are now tattooing their bodies with Nike swooshes. They tell themselves to “Just do it” when faced with challenges. They use swooshes instead of checkmarks on their homework. Every Nike Town or Park is a shrine. Inspirational quotes about victory, teamwork, honor, courage and other sporting lingo are on the floors and walls. The swoosh reigns supreme.

Where are you most likely to find young men in the cities? At the local Nike Park, buying Nike hats, shirts, caps, shoes, anything to wear at the neighborhood basketball court. To many, Nike and sports comes first in their lives. Their girlfriends come second. Inner city youth stab each other over a pair of $120 Nikes, when the actual cost of production is barely $5.

Magazines, clothes, and more!

Brands have ventured into publishing their own magazines. Benetton’s “Colors”, Starbucks’ “Joe” and Microsoft’s “Slate” are just a few examples. Puff Daddy (or P.Diddy) has his own clothing label Sean John, restaurants and a recording company. Shaquille O’Neal’s managers tried to negotiate for Team Shaq, which would be a whole group of brands under Shaq’s name, which Nike turned down. It would be against the principles of Team Nike. Even Michael Jordan put up his own retail concept shop JORDAN.

3. Alt. Everything

The Youth Market and the Marketing of Cool

There just seems to be no escaping branded space. Even “alternative” lifestyles come with their own brands. William Burroughs even did a Nike ad. Rave parties sell bottled water. Extreme sports, which was once the bastion of escape on the city streets during Sunday afternoons, is now a full-blown marketing arena for promoting sports gear and its own superstars.

Youth sub-culture is no longer free of commercial space. It all began when companies focused on the new demographic, recognizing the purchasing power of the teen-ager and twenty somethings.

“Loose jeans is not a fad. It’s a paradigm shift.”

Tony Blair’s carefully art-directed G-8 summit conference rooms impressed French President Jacques Chirac. He was marketing Cool Britannia – a young, modern, and dynamic UK. Tony Blair is a world leader as well as nation stylist, branding his party as the New Labour. The Brits are cool and the cool vote for Labour.

Corporations hire insiders/informants from the cool scene. Thus you have genuine hip young workers on casual Fridays, coming to work on roller blades or skateboards, exchanging rave party anecdotes by the water cooler. These change agents are not suits hidden underneath the hip-hop gear, they are the actual thing. By hiring young people, companies like to show they are on the edge and open to new ideas.

“When a thing is current, it creates currency.” – Marshall McLuhan

Cool Market Research

Market research today means hanging out with young people and partying with them, getting into their closets, their CD collections, and their conversations with each other. Market research is no longer about focus groups and lab-rat one-way glass observation.

So where do you find Cool?

The cool-hunters first stop: the basketball courts of America’s poorest neighborhoods. When Run-DMC would voluntarily endorse Adidas with its tribute “My Adidas”, asking thousands of concertgoers to wave their sneakers in the air, the once-skeptical executives at Adidas could not reach for their checkbooks fast enough.

What have marketers discovered? Cool in America means black youth, hip-hop, basketball, rap, shoes, low-slung pants, and a certain attitude. Companies pay kids or “street crews” to build word-of-mouth on the inner city streets about new products. . . . . . .

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