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Lifestyle Branding: A Contemporary Strategy for Taekwondo Schools in the 21st Century
MBA 8649 – Consumer Psychology
Thomas Pham Executive Summary The past forty years have been a transformative period for Tae Kwon Do (TKD) in the United States. The U.S. Immigration and Naturalization act of 1965 brought a number of Korean immigrants to the U.S. in search of opportunities. As many settled in metropolitan cities, Korean instructors set up TKD schools as a form of livelihood and as a vehicle to spread their culture. Schools at the time benefited from country-of-origin (COO) effect using the Korean master in the forefront to establish their brand identity. However, as the complexion of the TKD School changed from a Korean-centric to a multi-cultural activity, TKD schools naturally surrendered their attachment to a COO branding advantage. Despite the change in brand strategy or lack there of, the martial arts industry has never been more prosperous. According to Ferguson (1995), the martial arts industry is estimated at $1.5 billion. As a consequence, increased financial opportunity has created a competitive business environment that TKD schools are ill-equipped to handle. Most schools lack a brand strategy to guide them in the market and instead rely on core functional offerings while adopting fads and trends to generate revenue. As a result TKD schools face the problem of distinguishing themselves from both direct and indirect competition. Therefore, the purpose of this paper is to present lifestyle branding as a strategy for TKD schools to differentiate themselves from the competition and create higher barriers to entry. A 4-step framework originally developed by Hill (2008) but adapted to the particular needs of a TKD organization is presented as guide to creating a lifestyle branding strategy, thus enabling schools to have a contemporary approach as they operate in the 21st century.
Introduction: Coming to America Koreans have been immigrating to the United States since 1903. However, the number of Koreans immigrating into the U.S. skyrocketed following the passage of the Immigration and Naturalization act of 1965, which eliminated legal restrictions based on the origin of nationality, religion, ethnicity, or race. The number of Korean immigrants in the U.S. grew 27-fold between 1970 and 2007, from 38,711 to 1.0 million, making them the seventh largest immigrant group in the United States ( T e r r a z a s , 2 0 0 9 ) . As Koreans settled into their new homes, they spread their culture across the country by opening Korea towns and Tae Kwon Do (TKD) schools. Prior to that, the Korean War (1950-1953) gave the U.S. military exposure to the art of Tae Kwon Do through exhibitions and training of military personnel stationed in overseas air force bases ( B u r d i c k , 2 0 0 9 ) . Soldiers coming back from service in Korea who were exposed to TKD created the positive atmosphere necessary for the art to spread into the states. The steady diffusion of the art into the U.S. was led by pioneers such as Jhoon Rhee. It has been stated that Master Rhee taught the first American TKD class in 1956. What soon followed was considered the golden age of American martial arts, well-known for individuals such as Chuck Norris (Taekwondo), Joe Lewis (Karate) and Allen Steen (Taekwondo) who dueled one another on the National Karate Circuit. Many fighters in this era went onto fame in the movies, which further promoted the art. Therefore, the first generation of Korean immigrants to come over provided a service that the consumer base was eagerly ready to embrace. The “Cultural” Brand Early on, the TKD School’s brand identity centered on the Korean master who engaged in all school activities and function: instructing, management, and promotions. The school’s brand became aligned with the instructor’s persona. For example, many schools owned by KoreanAmericans used the master’s surname such as Cho’s Martial Arts or Chung’s Tae Kwon Do. At that time TKD schools benefited from COO effect to deliver an authentic martial arts experience. Many TKD schools created associations with Korea and its rich history to enhance the quality of the product since consumers are known to develop stereotypical beliefs about products from particular countries and the attributes of those products. Therefore the COO image has the power
to arouse importers’ and consumers’ beliefs about product attributes, and influence evaluations of products and brands (Srikatanyoo and Gnoth, 2002). Many consumers use COO stereotypes to evaluate products. For example, “Japanese electronics are reliable”, “German cars are excellent”, “Italian pizza is superb” ( Y a s i n , N o o r & M o h a m a d , 2 0 0 7 ) . Consumers therefore drew the conclusion that TKD taught by someone of Korean descent is considered “authentic.” Further reinforcing the brand and COO effect, schools also included cultural learning into the TKD curriculum. For example, practitioners are acculturated to the traditional Korean cultural ideas, norms, and behaviors (Ko, Zhang & Kim, 2009) and cultural learning played a factor in a consumer’s acceptance of TKD. According to Schmidt (1986), TKD serves as an expressive institution through which practitioners are acculturated to the traditional Korean culture, philosophy, and heritage. In addition, one of the specific features of TKD training is a unique opportunity to learn the Korean language. A TKD instructor uses the TKD terms in both English and Korean as a part of teaching. Students might pride themselves when they are able to speak such foreign languages and terms (Chami-Sather, 2004).Hence, COO effectively creates a strong brand, which helps the firm establish an identity in the market place (Aaker, 1996). In addition, it provides less vulnerability to competitive actions, larger margins, greater intermediary co-operation and support and brand extension opportunities (Delgado-Ballester and Munuera-Aleman, 2005). USA Taekwondo Today Moving into the 21st century the landscape of TKD in America is moving away from the Korean ethnocentrism that dominated it in previous decades and is heading towards a more multicultural activity. For example, in the past USA Taekwondo (USAT), the national governing body for TKD, was managed solely by Korean-Americans. For years the presidency and operations were handed down from one Korean Grandmaster to another. However in 2009, David Askinas become the first non-Asian CEO of the organization thus ending a reign that had lasted since the 1970s. Furthermore, the poster child for U.S. Taekwondo is now the Lopez family of Nicaraguan descent. In 2008, three of the four U.S. Olympic spots were claimed by the Lopez siblings. While the second eldest sibling Steven Lopez, a two-time Olympic gold medalist, has made appearances on the Today show and was named in People Magazine’s 50 Most Beautiful People.
Several factors have played a role in the diffusion of TKD away from Korean control in the states. As the first wave of Korean masters who established schools in the ‘70s and ‘80s approach retirement, many have passed on the knowledge and control to practitioners of nonAsian descent instead of their next of kin. One explanation for this trend is that Korean immigrants do not consider running a TKD school as a family business that should be passed down from generation-to-generation. They expect their children to achieve higher social standing by pursuing socially respectable careers in medicine, engineering or law. Asian American parents and their children differ from other racial and ethnic groups in their strongly expressed views of academic achievement as an avenue of social mobility and, quite possibly, as the only available avenue (Hsia & Hirano-Nakanishi, 1989). This story is not uncommon to European immigrants coming to America between 1850 and 1930 searching for better opportunities for themselves and their children. Secondly, Koreans no longer immigrate to the U.S. in the same numbers as in previous decades. According to the U.S. census bureau data (US, 2007) immigration of Koreans into the U.S. has dropped 35% from its peak in the 1980s from 322,708 immigrants to 209,758 in the most recent decade (2000-09). Lastly, a generation of non-Korean TKD practitioners has gone through a period of self-realization, recognizing that thoughtless reverence and compliance to the Korean master was passé and outdated. They wanted to incorporate western cultural values of self-expression and individualism into TKD. Thus, a new generation of masters and instructors of diverse heritage emerged to operate TKD schools in the U.S., creating an art that is multi-cultural and inclusive (S. Nelson, personal communication, October 5, 2011). As the number of non-Asians operating TKD schools grew, the connection to cultural learning naturally diminished. By diversifying the pool of TKD instructors, schools inadvertently detached themselves from the benefits of COO effect. Hence, many schools moved away from branding focused on the identity of the traditional Korean TKD master. Schools with non-Asian instructors avoided the use of surnames to identify their schools, instead adopting names without cultural connotations such as PowerKicks or Tiger Martial Arts. This is in no way suggesting that TKD has suffered any backlashes from a change in brand strategy. Rather, martial arts has become a big business. In the U.S. alone, there are approximately 13,950 martial arts schools (Info-USA, 2007) and more than 4.7 million martial arts participants in 2004 (Sport Business Research Network, 2004). Ferguson (1995) noted that “enrollment in studios
specializing in Eastern martial arts pursuits such as Karate and Taekwondo has about doubled over the last five years.” The rise can be attributed to young Americans growing up with images of martial arts, such as "The Karate Kid" and "Mighty Morphin' Power Rangers." A number of movies, cartoons, books, and television programs featuring martial arts have been popular among young Americans to the point where martial arts is a part of youth culture (Yang, 1996). Currently, new forms of martial arts events such as Extreme Martial Arts (XMA) and Ultimate Fighting Championship (UFC) have become popular entertainment options. As a result, interest and participation in the martial arts over the last 20 years has been tremendous (Cox, 1993). Consequently, the growth of the martial arts industry has created a highly competitive business environment. In the U.S. market, TKD schools face internal competitions with other martial arts schools (Kim, Zang, Ko, 2009). Furthermore, external competition exists from other sport organizations, such as racquet clubs, health-fitness centers, and parks and recreational facilities (Parks & Zanger, 1990). Today, TKD schools position themselves to compete on expansive product offerings focusing on the family and parents searching for alternative forms of after-school activities. In response, schools are diversifying their programs by incorporating such programs as after-school programs, unique belt promotion ceremonies, family programs, and child-care services to attract current and potential participants (Kim, Zang, Ko, 2009). However, by competing on product offerings and functional attributes schools risks commoditization, leading to lower barriers of entry for new participants. In addition, marketing efforts in martial arts including TKD schools lag behind other business industries (Ko, 2003). Therefore, with the current landscape, opportunities arise for schools to develop brand strategies unique to the industry. In the subsequent sections, lifestyle branding will be discussed as a brand strategy TKD schools can apply to broaden their reach and differentiate themselves from the competition. Lifestyle Branding Marketing has evolved through the decades. In the late ‘80s, "niche marketing" was the primary focus and in the '90s, "branding" became the magic buzzword. Coming into the 21st century “lifestyle branding” is emerging as a strategic avenue to capture the hearts and minds of customers (Gray, 2008) .Lifestyle branding has gained popularity among companies, which view it as a way to sidestep competition and connect with customers in a more personal way
(Chernev, 2011). This can be appealing for industries that are facing increased commoditization of their products and services. Lifestyle branding attempts to embody the values and aspirations of a group or culture for the purposes of marketing. Each individual has an identity based on their choices, experiences, and background. A lifestyle brand aims to sell products by convincing potential customers that this identity will be reinforced or supplemented if they publicly associate themselves with the brand (Gray, 2008).For example, Anthropologie targets upscale young women with products inspired by the cultures of Europe, India, and the Far East by creating a vision of a high-end yet very hip lifestyle that consumers aspire to. On the other hand, Abercrombie & Fitch captures the college student lifestyle with its A&F Quarterly catalog and store layout. By associating with lifestyle products, consumers derive emotional and self-expressive benefits associated with the brand. According to Aaker (2011), when a consumer experiences two or more benefits, the user experience is usually broader and more rewarding than a product based primarily on functional benefits. The emotional benefits relate to the ability of the offering to make the customer feel something during the purchase or user experience. A perfect example is Apple, although the brand starts with the product it doesn’t stop there. An interaction with Apple is an emotional experience from start to finish. The stores are alluring and clean while its minimalist products give it an ethereal beauty which transcends any functional advantages that its competitors possess. Every piece the consumer sees or interacts with, from the packaging to the retail environment, communicates the same consistent message “smart, cool, sophisticated, authentic, friendly.” Hence, customers are proud to be associated with it because their experience is positive and rewarding, which makes Apple a great example of a consumer lifestyle brand. Alternatively, self-expressive benefits reflect the ability of the consumer and use of an offering to provide a vehicle by which a person can express him- or herself (Aaker, 2011). Selfexpressive benefits are based on the “I am… statement”, for example, “I am sophisticated when I wear Ralph Lauren.” Brands can also be used to communicate membership in particular social or professional groups, through both the use of brands that signal membership in desirable groups (Braun and Wicklund 1989; Escalas and Bettman 2005; Wicklund and Gollwitzer 1981) The P90x franchise is an exemplar of an active lifestyle brand that incorporates functional and self-expressive benefits. Through the use of transformative marketing and aspirational cues with attractive and fit actors, P90x has created a brand which consumers are proud to be associated
with while serving as a vehicle to signal “who they are.” Even though the product is meant to be done in the privacy of the home, consumers go out of their way to publicly express association with the product. A search on YouTube for ‘P90x’will unearth thousands of consumers providing unsolicited advertisement, further reinforcing the brand through social proof. As a result Beachbody, the company behind P90x, has reaped over $400 million a year in revenue (Martin, 2011). Recommendation: Lifestyle Branding Framework As TKD moves into the 21stcentury, the rapid growth of the martial arts industry has created a competitive environment. Therefore, TKD schools need to move beyond marketing based on functional product offerings or suffer the effects of commoditization. As a recommendation, TKD schools should explore lifestyle branding as a strategy. The following 4-step process developed by Hill (2008) offers as a framework in creating a lifestyle brand. The framework identifies the following steps: 1) research, 2) strategy, 3) identity and 4) execution.
It is by no means a comprehensive manual to lifestyle brand creation, but will provide a solid foundation for TKD brand managers moving forward. With the appropriate investment of time and consideration into development, schools can reap great rewards since the creation of a lifestyle brand can provide the competitive advantage necessary to excel in a competitive market. Research This involves analyzing what the competition is doing and saying to define and maintain a competitive edge. Competitor analysis should involve indirect competitors (i.e. other sports, fitness clubs) and direct competitors (i.e. other martial arts schools) and analyze points of parity as well as points of differentiation. The most relevant benefit for TKD schools derived from
competitor analysis is the insight into future competitor strategies which may allow prediction of emerging threats and opportunities. Weaknesses of competitors can represent an opportunity to exploit them, while strengths of a competitor on important dimensions may represent a challenge or threat which should be avoided (Aaker, 2011). On the consumer side, it is important to understand the existing customer base as well as the desired customer. Customer analysis can be broken down to three subcategories:
1) Segmentation-the identification of customer groups that respond differently from other
groups to competitive offerings. 2) Customer Motivations-identifying the reasons behind customer purchase decisions and how it differs by segment. 3) Unmet Needs-a customer need that is not being met by the existing product offering. TKD brand managers should exercise due diligence when researching competitors and consumers. The insight derived from the comprehensive analysis will aid in the creation of a robust brand positioning strategy. Strategy Once research is conducted and analyzed to identify opportunities, it is essential to create a solid brand positioning strategy along with defining the core values and meaning of the brand. Meaning is born through developing a comprehensive understanding of a brand in order to inspire the creative process (Hill, 2008). Meaning can be derived from the core competencies of the school but should not be limited to it. For example, a school can derive its meaning focused on competition-oriented TKD versus tradition TKD. The competition-oriented TKD schools emphasize tournament competition, which focuses on teaching technique. Traditional TKD schools, however, devote attention to self-defense techniques and mental development (Kauz, 1993). Core values are principles that guide a school's internal conduct as well as its relationship with the customers. It can be acquired from beliefs the head instructor embodies or wishes to possess. For example, Zappo’s core value is “Deliver WOW Through Service”, Whole Foods is “Selling the Highest Quality Natural and Organic Products Available”, while Men’s Wearhouse defines its corporate values in its signature slogan “You’re gonna like the way you look. – I guarantee.” Identifying solid yet attainable core values will give the school purpose, and prevent it from making bad choices in the face of ethical decisions.
Brand positioning strategy defines what position a brand will take in the marketplace. The information acquired from the research section should identify what strategy the school should exercise. A TKD brand manager will utilize information obtained from the research section to find opportunities to exploit and threats to avoid. A brand manager must identify whether the school’s core values and competencies enable it to take advantage of potential opportunities for growth. If the strategy is well-informed and targeted, a brand's core values should naturally align with the values of the target market, creating the foundation of a successful consumer lifestyle brand (Hill, 2008). Identity Once brand positioning is complete, it is essential to create a solid brand identity. Brand identity provides direction, purpose, and meaning for the brand. It is a set of associations that the firm aspires to create or maintain, an aspirational external brand image (Aaker, 2011). The first step for a TKD school is to create an inventory of associations that invoke positive emotions for the consumer. For large organizations this list can extend from 50 to 100 associations. However, for a smaller business such as a TKD school the list can be scaled down. The following is a sample of positive associations grounded on the tenets of the TKD: Discipline Courtesy Strength Moral Effective Respect Self-control Courage Honor Awareness Integrity Honesty Perseverance Resolve Diligence
The list should then be filtered down to a manageable set of associations (around 6 to 12) that are desired for the brand. These focused associations are then used to create a distinct brand personality. Since a business with a personality tends to be more memorable and better liked than one that is bland, it is nothing more than the sum of its attributes (Aaker, 2011). For instance, IBM is seen as “older,” while Apple is perceived as “younger.” A noteworthy illustration of brand personalities is the Apple commercials contrasting the opposing personalities of a younger, hipper Apple personality played by Justin Long and a drab and frumpy PC played by John Hodgeman. Therefore, in order to create an effective lifestyle brand the personality chosen by the TKD brand manager should be a trait seen as attractive to its target market, someone they want to associate with or aspire to be. It should help the TKD practitioner
express a part of their personality and “who they are.” Although a sample list of associations was provided, the choice of associations and personality should be limitless, and not be restricted to preconceived stereotypes associated with TKD. The only limitation resides in the creative powers of the brand manager. Execution Branding is a truly holistic process. A successful campaign is consistent through all brand touch points (Hills, 2008). From the time a student walks in the door to the time he or she leaves, the brand communication must be visually and verbally consistent to have its desired effect. According to Aaker (2011) image and positioning information can be deduced in part by studying a firm’s products, advertising, Web site and actions. Thus, school websites, promotional material, layout and environment must all be in harmony. Marketing efforts in martial arts, especially in advertising has been lacking. Re-examination of current promotional activity is necessary to determine whether the message communicated is one founded on functional benefits or self-expressive and emotional benefits. Image 1, shown below, illustrates a common martial arts promotion focused on functional attributes. Alternatively, image 2 not only conveys associations based on discipline, self-control, and fitness, but also exhibits aesthetic cues. To attain a lifestyle brand, imagery should move past communicating usability. It needs to evoke a connection with the consumer on a visceral level through artistic and emotional signals. For example, the sleek lines of a classic automobile appeal to this level of experience.
TKD schools must also consider whether the current product offering is a good fit with its brand. Based on functional synergies and the enticement of extra revenue streams, many TKD schools have expanded their product offerings to include services such as daycare centers, sleepover events and birthday parties. Therefore schools considering product and service expansion need to assess whether inclusion of additional products or services is consistent with its brand. An extension that fails or has inappropriate associations can damage a brand (Aaker, 2011). Being authentic and being connected to the program will all be easier if there is a good fit because one weak link can have an impact on consumer confidence (Hill, 2008; Aaker, 2011). Implications Proper development and execution of a lifestyle branding campaign can pay dividends for TKD organizations. The most salient benefits of an effective campaign include: 1) Expanded market segment, 2) Product differentiation, 3) Increased brand loyalty. First, by applying a lifestyle brand strategy, TKD schools can reach out to a broader market segment. Nike is a good example. What started as a running shoe company now extends to anyone who wants an athletic lifestyle, allowing Nike a presence in product categories such as apparel, watches and audio equipment (Birkner, 2011). For instance, a TKD school that crafted its brand by emphasizing associations with discipline and self-control can expand to segments unrealized by traditional TKD marketing techniques. In theory, this could represent smokers who want to quit or overweight Americans which represent 19.8% and 74.1%(Dunham, 2008; Streib, 2007) of the population, respectively. Second, in an increasingly competitive environment, TKD schools are finding it difficult to distinguish themselves from one another. In an effort to set themselves apart, schools engage in an arms race by adopting new product offerings. Schools today are already face staffing limitations consisting of a handful of part- and full-time employees. Since expanding the current product offerings involves the extra burden of educating and training the current staff, they risk moving away from their core competency. Lifestyle branding creates a position based on intangible qualities (i.e. emotional and self-expressive benefits), making it harder to replicate. As a result, lifestyle branding can provide the silver bullet that enables a school to differentiate itself while remaining true to its core competency, teaching TKD.
Lastly, brand loyalty has always been a problem for TKD schools. According to Kim, Zang and Ko (2009), the operation of a TKD school primarily relies on the revenue generated from its membership fees. Thus, membership is a major income producer and member retention is a common challenge in TKD schools. In addressing this issue TKD schools have engaged in highpressure tactics of locking students down through contracts to increase retention rates. Consequently such tactics can create resentment with consumers who might feel coerced into a long-term agreement, no different from the feelings conjured up from signing a wireless service plan. On the other hand an effective lifestyle branding campaign creates a zealous fan base that is eager to purchase the product, relieving schools from employing the hard sell. For example, through the use of lifestyle branding Harley Davidson is much more than motorcyles; it is an experience, an attitude, a lifestyle, a vehicle to express “who I am” (Aaker, 2011).By helping consumers express “who they are” it inspires loyalty with its base which in turn translates into purchase and repurchase of items by its fans. Harley-Davidson says two-thirds of its motorcycle purchasers are repeat buyers. Buyers are so eager to own a Harley that they will wait for more than a year for delivery, once they've ordered a model from their dealer (Birkner, 2011). Conclusion This paper examined the evolving brand strategy of TKD schools in the U.S. for the past four decades. It identifies the issues TKD schools face today, most noticeably marketing and branding. A cursory glance at the market shows lifestyle brands such as Crossfit, Zumba and P90x have successfully marketed fitness to America, so the opportunities are present. But to exploit these opportunities it requires TKD organizations to move past a short-term tactical mindset towards a broader strategic outlook, one recommendation presented has been to adapt lifestyle branding to achieve this goal. The paper has presented a detailed 4-step framework for achieving this objective, but it is up to TKD organizations and its employees to develop and execute it. Hopefully with success schools can operate in the 21st century with a contemporary and effective brand strategy while reaping the benefits that accompany it.
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