[MUSIC] Now, you still may be wondering is do brands travel well from country to country? I say certainly its identity not the same and its meaning is not the same as we go from one country to another country. Let's look at what Howard Schultz, the CEO of Starbucks, had to say about global brands and how can they maintain their identity, as they grow from country to country to country. >> Well, I think I have to begin by stating something I think is important, and that is the equity of the Starbucks brand has been built very differently than a traditional consumer brand. Primarily, we did not advertise and have not spent money on traditional marketing. So the business quintessentially was based and built by the experience in our stores. And that experience comes to life based on the relationship we have with our people and they have with the customer. What we've been able to do though, in all over the world, is that experience, is as relevant in Dubai, in Shanghai, and Madrid, as it is in our home market in Seattle, because we've touched on something that is not American. It is a sense of humanity, connection among people and the sense of community that exists in our stores. We've also found that customers all over the world want the core Starbucks experience and then the responsibility on us is to create local relevancy in terms of food and other things that are based on the unique differences in that market. But I think we're one of the few western brands that have been able to expand all over the world in the same way that we expand in Seattle. >> But sometimes diversification is not enough. Sometimes brand do really run their course, and they need to start thinking about relabeling, repositioning, or rebranding. Let's take the case of Pepsi. Pepsi thought that its top carbonated drinks, in general, being meaningful to young audiences that started moving away from carbonated soft drinks into other things. So its traditional positioning of Pepsi was being threatened. And in addition, they were slightly using market share towards the year 2010 and they had continued for a couple of years in the North American market, which is the main market for carbonated soft drinks in the world. So Pepsi had the idea of trying to reposition itself to become more meaningful to young generations. They thought that what they care is about community causes, they care about sustainability and they care about education and they care about the arts. And Pepsi tried to capture its position. How? By running the Pepsi Refresh Project by which they stop investing over $100 million that they used to spend every year in traditional marketing reinforcing their identity of being young and youthful and the drink of the new generation. And instead, they invested into a bunch of grants, almost 20 million of them, from small ones, around 50,000, to very large ones, around 250,000, that covered the entire geography of the United States. Where the people submitted ideas for the different projects, they also voted for the ADS and outingly ended up choosing which one we're going to get funded. Until today the Pepsi Refresh Project is known as one of the largest rebranding or repositioning attempts in specifically switching from using traditional media to using social media, as the main driver of communicating this new effort by Pepsi. This effort was discontinued two years later. Not because it did not receive enough traction in social media, that part worked just fine. But essentially because it did not stop the market share loss of Pepsi to Coca-Cola in the North American market, losing hundreds of millions of dollars in potential revenue. So they went back to traditional marketing, including sponsoring the Super Bowl and in particulary they went back to Beyonce, which was the traditional methodology by which Pepsi had advertised itself. So as you can see rebranding and repositioning in spite of large companies' best effort, it is one of the most difficult things to every achieve. Chief amongst which is because consumers form an expectation. They form an identity, and then moving away or travelling away to actually rebuild a new identity, or a new persona for the brand is a notoriously difficult task. It has been very, very seldom executed well, and most attempts of repositioning or rebranding traditionally fail. So as a light exercise, I'm going to leave you with this thought process. What do you think of Budweiser relabeling its main brand to America? This is an exercise that is going to happen from this summer of 2016 until November. Do you think it's a good idea, or do you think it's a bad idea? What do they have to gain and what do they have to lose by this relabeling exercise, which is not entirely a rebranding exercise? But certainly taking advantages of the U.S elections, the summer Olympics and perhaps a few other events to transition from Budweiser to America and then back to Budweiser. Now that you have completed this course, you have the tools to think more carefully through this process. Good luck. [MUSIC]
