Superbrands 2004 - Brand Autopsy

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Superbrands BRAND Sad Story: Why Do the Little Ones Grow Up So Fast? By Todd Wasserman Arecent survey by the NPD Group found that most boys would rather play a G.I. Joe videogame than play with a G.I. Joe action figure. This finding is perhaps not surprising to brand executives who have watched videogames slowly supplant traditional toys, a $20.7 billion business that was down another 3% last year. Retailers, psychologists and industry observers who’ve witnessed the trend call it “age compression,” whereby kids abandon traditional toy categories at increasingly younger ages for more sophisticated products, such as cell phones, DVD players, CD players, MP3 devices and other electronics. Retail sales of video consoles and games combined for more than $10 billion in sales last year, nearly half the toy industry’s take and outpacing domestic movie box office rates for the third year. If that wasn’t enough to depress Toys “R” Us, the No. 2 player in toys, the variety of venues selling all those other games hurt, too. TRU’s fourth quarter 2003 sales fell 48%, primarily due to a 22% decline in sales by its videogame departments, which the company owed to a lack of new videogame systems. More bad news for TRU: There’s no big console launch slated for this year, either. Sony estimates it will sell 30% fewer PlayStation 2s this fiscal year (which started April 1). Microsoft, meanwhile, is said to be targeting 2005 for its next-generation game console, code-named Xenon, but PlayStation 3 probably won’t be out until 2006. The only glimmer of hope comes for Nintendo DS, a Game Boy sequel that’s expected to hit the U.S. sometime this year. Sony is expected to challenge Nintendo’s supremacy in the handheld game space, but not until next year. Against this backdrop, one might think the two toy giants that don’t have a game console—Mattel and Hasbro—would be foundering. That’s not the case, though. Mattel’s revenues rose 2% last year to $4.96 billion, as lower domestic sales of Barbie and Hot Wheels were offset by Fisher Price and newcomers like Yu- Gi-Oh!, along with gains overseas. A streamlining of operations combined boys and girls entertainment properties as the giant aimed to keep costs in check and improve top-line growth. * estimated Sources: Brandweek research (sales); TNS/CMR (media); Harris Interactive/EquiTrend: QxFxPI=E (see key, page S18) S66 JUNE 21, 2004 COMPANY NAME, LOCATION TOYS Hasbro’s revenues, meanwhile, jumped 11% to $3.14 billion on the strength of products like Beyblade, Furreal Friends, My Pretty Pony, Video Now and the hip Bratz dolls it distributes for MGA Entertainment. Earnings were only $175 million, or 5% of revenues. Mattel boosted its marketing spend to $636 million (worldwide) in 2003 versus $552.5 million the year before, but is reviewing its budget strategy for this year, per its annual report. Hasbro took a similar gamble, upping its ad spend to $363.8 million (worldwide) versus $296.5 million the prior year. Hasbro said it intends to keep spending to back its core brands and tie-ins with Disney/Pixar’s The Incredibles following its current run with DreamWorks’ Shrek 2. But after suffering through some movie tieins that didn’t live up to the hype, Hasbro is also making existing brands like Candy Land, the Weebles and G.I. Joe more like movie properties by bundling them with back story DVDs. In particular, the 40-year-old G.I. Joe will get a Valor v. Venom DVD to be promoted via a fall tie-in with McDonald’s. Mattel has also seized on the back story idea and is limiting its promotional exposure to Paramount’s SpongeBob SquarePants Movie and Nickelodeon TV properties. Lego, which took a bad tumble on licensed merch in 2003, will try a refresh with its Knight’s Kingdom construction set. Retro names got renewed interest not just from kids, but the Hot Topic set, as Care Bears licensed merch hit $250 million and Strawberry Shortcake piled up $210 million. On tap this year: Girl-powered fantasy toys Fairytopia (Mat- Back story: Hasbro spins tales to pump tel), Winx Club (4Kids Entertainment) and up its 40-year-old soldier, G.I Joe. Fairees (Bratz), all picking up on magical interest sparked by Harry Potter’s gal pal, Hermione. Retail consolidation continues to remake the category: 2003 saw more store closings (Zainy Brainy, Imaginarium and Kids “R” Us) and the bankruptcy of FAO Schwarz. Wal-Mart is now the country’s top toy seller, which explains some of TRU’s troubles, but also presents a red flag for toymakers. With fewer units, some distribution expenses will be lower, but Wal-Mart’s penchant for holding down prices will make it hard for brands to count profits. Overall, 2004 will likely be a ho-hum year. Without a hint of irony, Michael Redmond, senior industry analyst at NPD Funworld, called the toy category “mature.” “Back in 1999 [the category] grew 5%, but we had the WWE, and Furby and lots of licensing activity,” he said. “Since then it’s been up or down 2-3% a year.” B LEAD AGENCY, LOCATION 1. Sony PlayStation Sony, Foster City, CA TBWA\Chiat\Day, LA $7.5 $95.9 7.04 70% 7.22 59.4 T2. Mattel Mattel, El Segundo, CA Young & Rubicam, NY 5.0 186.0 7.14 86% 7.29 60.9 T2. Nintendo Nintendo of Am., Redmond, WA Leo Burnett, Chicago 5.0 84.7 6.91 79% 6.70 56.4 4. Hasbro Hasbro, Pawtucket, RI Grey, NY 3.1 118.3 6.86 72% 7.44 58.6 5. Microsoft Xbox Microsoft, Redmond, WA McCann-Erickson, NY 2.8* 15.9 N/A N/A N/A N/A TOTAL SALES (billions) MEDIA EXPENDITURES (millions) QUALITY FAMILIARITY PURCHASE INTENT EQUITY www.brandweek.com
TRAVEL Low-Fare Airlines Rule Skies While Hotels Add Services By Mike Beirne In a year in which low-fare airlines stole headlines and passengers, more hoteliers took to branding with the realization that price alone cannot trump all else in a commodity market. Cookie-cutter rooms, double beds and television armoires are quite forgettable. But mention W or a Kimpton property to frequent travelers, and the name often triggers recall of a unique style and personality. Marketing gurus would say it creates an “ownable experience.” Hilton sweetened the check-in with walk-up kiosks that eliminate the front desk wait. Soon, Carlson Group’s Radisson will up the ante with its Express Yourself option, which enables guests to check in online prior to arrival and stop by the front desk just long enough to be handed their room key. Hampton will spend $80 million restaging itself by playing up the Hampton 100% Satisfaction Guarantee and adding items—including a portable lap desk, proprietary alarm clocks and curved shower curtains—that will only be found in the mid-tier brand. Snoozing, too, is garnering a bigger chunk of the branding formula. Starwood brands Westin and Sheraton staked claims to a good night’s rest by marketing Heavenly and Sweet Sleeper beds, respectively. Now, Radisson will install 90,000 Select Comfort Sleep Number beds throughout its chain, and InterContinental’s Crowne Plaza collaborated with a sleep expert to develop a Sleep Advantage package that includes a guaranteed wake-up call (otherwise the stay is free), a CD with soothing sounds, night lights and clips on drapes to eliminate early morning sunlight. Airline executives, by contrast, could rarely be accused of overcompensating in their attempts to understand travelers and consistently give them what they want—at least in the days of high walk-up fares. In recent years, Southwest, JetBlue and Air Tran BRAND COMPANY NAME, LOCATION Superbrands have delighted flyers with a low-cost business model and managed to grow in the most commoditized travel industry by delivering better service and consistently cheaper fares. Legacy carrier American West, which morphed into a low-fare airline in 2002 as it chucked Saturday night stay requirements, capped fares and sold food, has been in the black for four consecutive quarters. Regional carrier Atlantic Coast Airlines also transformed recently into Independence Air, the low-fare, hometown airline for Washington, D.C., backed by a $40 million ad push. United and Delta decided that if you can’t beat ’em, emulate them, launching Ted and Song. With United hoping a federal loan will help it exit bankruptcy this summer and Delta warning that it may file for Chapter 11, the potency of their low-fare spinoffs has yet to be established. “If you can figure out how to deliver value without charging consumers more for it, you’ve really got something,” said Ron Cole, vp-sales for America West. “And you’re in really good shape if you can do that without raising costs.” That’s the task facing U.S. Airways, which now has to fight off Southwest in its Philadelphia backyard. Differentiation is becoming more critical as consumers increasingly shop for travel online— one-third of all travel was booked via the Internet last year—where they face a litany of choices. Marriott has about a dozen lodging brands, Rose colored glasses: United rebranded but how many consumers know that Fairfield with animated campaign’s emotional pull. is the mid-tier product and Residence Inn is the extended-stay brand? How will they learn in a world where communication media are fragmented and consumers are already tuning out a deluge of advertising? If consumers perceive little differentiation among products, they will make more of their travel selections based on value. As a result, travel search engines like SideStep.com and Booking- Buddy.com, which display side-by-side comparisons of prices from LEAD AGENCY, LOCATION AIRLINES 1. American AMR, Fort Worth, TX Temerlin McClain, Irving, TX $17.4 $77.7 6.59 80% 7.01 56.5 2. United UAL, Elk Grove Village, IL Fallon, Minneapolis 13.7 76.4 6.46 81% 6.91 55.1 3. Delta Delta Air Lines, Atlanta Brighthouse, Atlanta 13.3 39.9 6.63 78% 7.01 56.0 4. Northwest Northwest, St. Paul, MN Carmichael Lynch, Minneapolis 9.5 21.7 6.50 66% 6.82 54.5 5. Continental Continental Airlines, Houston Kaplan Thaler, NY 8.9 17.4 6.45 69% 6.47 51.5 6. Southwest Southwest Airlines, Dallas GSD&M, Dallas 5.9 132.6 6.88 71% 7.26 58.5 7. US Airways US Airways, Arlington, VA Eisner, Baltimore 5.3 14.9 6.35 66% 6.72 52.8 8. Alaska Air Alaska Airlines, Seattle WongDoody, Seattle 2.4 9.2 6.77 31% 6.74 52.9 9. America West America West Airlines, Phoenix Moses Anshell, Phoenix 2.3 5.2 6.50 47% 6.63 52.1 10. ATA ATA Holdings, Indianapolis Romani Bros., Chicago 1.5 34.8 6.27 30% 6.37 47.6 Sources: Brandweek research (sales); TNS/CMR (media); Harris Interactive/EquiTrend: QxFxPI=E (see key, page S18) www.brandweek.com JUNE 21, 2004 S67 TOTAL SALES (billions) MEDIA EXPENDITURES (millions) QUALITY FAMILIARITY PURCHASE INTENT EQUITY
Page 1 and 2: A SPECIAL REPORT nD Bra s r su u pE
Page 3 and 4: Superbrands EDITOR’S NOTE Heeding
Page 5 and 6: www.brandweek.com JUNE 21, 2004 S7
Page 7 and 8: Superbrands decline of the departme
Page 9 and 10: Superbrands attire rowing a mahogan
Page 11 and 12: Superbrands BRAND Sales Struggle as
Page 13 and 14: Superbrands BRAND In Tight Market,
Page 15 and 16: Superbrands BRAND ascension to Merc
Page 17 and 18: BEER, WINE and LIQUOR the wall. Mil
Page 19 and 20: Superbrands BRAND Colas Stuck in th
Page 21 and 22: Superbrands BRAND Microsoft Tries t
Page 23 and 24: Superbrands BRAND Amid Changing Dem
Page 25 and 26: Superbrands BRAND A Latte with That
Page 27 and 28: ENTERTAINMENT of the class,” said
Page 29 and 30: Superbrands BRAND Say Goodbye to
Page 31 and 32: Superbrands BRAND Crowded Low-Carb
Page 33 and 34: FOOD The Atkins backlash, meanwhile
Page 35 and 36: Superbrands BRAND Crest Gaining on
Page 37 and 38: Superbrands BRAND In a Rather Dirty
Page 39 and 40: Superbrands BRAND Gas Companies Ble
Page 41 and 42: PHARMACEUTICAL/PRESCRIPTION DRUGS D
Page 43 and 44: RETAIL to open as many as 100 store
Page 45: TOBACCO Consumption Down Slightly A
Page 49 and 50: WORLD WIDE WEB Web Players: Let’s
Page 51 and 52: RANK/ BRAND America’sTop 2000 Bra
Page 53 and 54: BRAND INDEX America’sTop 2000 Bra
Page 69: BRAND INDEX America’sTop 2000 Bra

Superbrands 2004 - Brand Autopsy

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