Friday, May 11, 2012

Rebranding: Why we are buying old products at new prices

There is nothing better than a makeover. An old used product given a new look, because we all know image is everything in this world.

I was actually inspired to write this post when I saw a "foodie" refer to strained yogurt as "Greek Yogurt". Yoghurt was invented in Turkey and "yoghurt" is a Turkish word,yoghurt  has also been around for centuries, so why is it called Greek in the US? This is not a Greece vs. Turkey question. It is a yoghurt question.

Well it seems like the first people to market strained/filtered yogurt in the US were Greek. This naming oddity results in the fact that the owner, Hamdi Ulukaya, of the third largest Yogurt maker in the US, Chobani, is Turkish, but of course he simply makes "Greek" yogurt the traditional Turkish way[1]. Confused?

In the US, naming products is many times a matter of what society we admire. In Belgium, some  chocolates are described as coming from the finest West African (Cote D'Ivoire and Ghana) cocoa. In the US, this is non-existent, chocolate is referred to as Belgian, German, Italian, French, etc. Do we have rules on how deeply we seek the origin of products? Why are wine and coffee, unlike chocolate, labeled by the region of the grapes and beans used to make them?

It is well known labeling carries value as with "Made in Germany", but does that value mask the origin of products? Does it bias our perception of quality.

Just take a look at the recent emergence of dark chocolate, spawned by Craig Sams of Green and Black. Prior to Green and Black's launch of Central American dark chocolate, dark chocolate was seen as a "Mexican thing" with exposure in only Mexico and Spain. When Green and Black launched dark chocolate in the 1970's as an alternative snack for the sugar-conscious healthy consumer, dark chocolate surged in popularity. Swiss Chocolate Maker Lindt, who had originally ignored Sams' request to expand distribution beyond Spain, jumped on board. The chocolate industry provided millions of dollars in research for the University of California, Davis and San Francisco to appeal to the college-educated consumers' "informed" decision making[2]. Did I mention, these companies were simply selling the same chocolate that has been produced south of the border for centuries. In essence, they took a valueless product in the US and created a highly priced commodity through an appeal makeover. Now the Mexican origins are forgotten.

Ghana chocolate bar made in Japan

It's quite funny, it is actually a case of national sponsorship as opposed to personal sponsorship. Just like most sponsored products, you don't really know where they came from, only who markets them, e.g. the George Foreman Grill.

As Mr. Ulukaya says, he really doesn't mind what yogurt is called, he says he focuses on the actual product. Most importantly, he emphasizes that he anticipates what the consumer wants.


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