The case describes the story of Sri Lanka based Dilmah Ceylon Tea, a company founded in 1988 by  Merrill J. Fernando. The company had pioneered the concept of ‘single-origin tea’ to its latest innovative Elixir range. The premium positioned tea was ‘picked, perfected and packed’ at origin with a brand based on three pillars: taste, goodness, and purpose. Present in over 105 countries, it had become one of the most well-known Sri Lankan brands worldwide. The group invested a minimum 15% of its pre-tax profits in humanitarian and environmental initiatives through the MJF Charitable Foundation and Dilmah Conservation and Sustainability Unit (DCSU). However, the tea business was becoming increasingly competitive with the largest player, Unilever, about to sell its tea portfolio. The current CEO, Dilhan Fernando, needed to address several key questions, in this context: How could the Dilmah Ceylon Tea brand ensure the margins necessary to thrive and grow? Which customer segments and geographies should it focus on? Could it potentially leverage its investments in humanitarian and environmental initiatives to achieve better margins and

Five experiments document that the mere circularity and angularity of a brand logo is powerful enough to affect perceptions of the attributes of a product or company. It is theorized and shown that circular vs. angular logo shapes activate softness and hardness associations, respectively, and these concepts subsequently influence product/company attribute judgments through a resource-demanding imagery generation process that utilizes the visuospatial sketchpad component of working memory. There are no logo shape effects on attribute judgments a) when the visuospatial sketchpad component of working memory is constrained by irrelevant visual imagery, b) when people have a lower disposition to generate imagery when processing product information, and c) when the headline of the ad highlights a product attribute that differs from the inference drawn from the logo shape. Further, there are shape effects even when the shape is incidentally exposed beforehand using a priming technique rather than being a part of the logo itself, demonstrating the generalizability of our findings. When taken together, the results have implications for working memory, consumer imagery, and visual marketing.

An emerging cola brand from Peru schools the giants on how to achieve big growth.

AJE, the Peruvian purveyor of Big Cola, with global sales of $2 billion, has achieved sales growth of an average 22 percent per year from 2000 to 2013. PepsiCo on the other hand, recently outperformed Coca-Cola’s negative 1 percent growth in net sales (and 3 percent decline in profits) by reporting a topline growth of 4 percent. AJE may be a minnow compared to the big cola companies, but it’s outperforming them.

The book chapter reviews the stages that branding research has gone through–transaction exchange model, relationship partner model and marriage model–and discusses the implication of the nature of the relationship model a consumer has with the brand on how brand transgressions may affect the consumer.

The transaction exchange model views that brand brands/products are the means of transaction between consumers and sellers (company) and brands/products fulfill the expected utility of consumers (Silerberg and Suen 1990).

Departing from the transaction exchange model, the relationship partner model takes a long term focus between brands and consumers and emphasizes how consumer’s needs are fulfilled by brands, which partially explains consumer loyalty toward brands in terms of emotions and repeated purchases (Fournier 1998). In the marriage model, brands are conceptualized as intimate relationship partners like spouses.

We argue the latter is a particularly useful perspective as it helps us to understand the contingencies under which a consumer-brand relationship can bread down as well as how to recover from a transgression on the part of the brand.

Ararat, the largest brand of brandy in Russia, with an enviable 32% market share and a long history, was one of the jewels in Pernod Ricard Russia’s alcoholic beverage portfolio. After a recent product update, five key questions needed to be answered: 1. Which consumer segment(s) should ArArAt be targeted at? 2. What should be the ArArAt brand platform? 3. Which of the five advertising options before him (recent agency pitches for the ArArAt account) should he choose? 4. Should all seven sub-brands in the ArArAt portfolio feature in the campaign, or only some of them? If the latter, which ones should he select? 5. In which magazines should the ads be placed?

This paper focuses on both similarities and differences across two cultures, Chinese and Caucasians, in one specific domain: color. While existing research regarding similarities vs. differences in hue preferences as equivocal, we propose that under conditions where the hues are displayed prominently, there will be no cultural differences in hue preferences. Feelings elicited by the hues will mediate preferences, feelings that previous research suggests are elicited for biological reasons.

We also suggest that when salient cultural norms are present for a given situation (e.g., the hue associated with a holiday occasion), then consumer hue preferences for that occasion should be driven by these salient cultural norms rather than general hue preferences. In the absence of salient cultural norms, consumer hue preferences for an occasion depend on their general hue preferences, which will be similar across cultures.

The empirical findings of two studies support our perspective.

A couple of years ago HTC was, if anything, nosing ahead of Samsung in smartphones. In fact, in the last quarter of 2011, HTC had become the bestselling smartphone brand in the US! An amazing achievement for a firm that entered the branded business only in 2004! Then HTC slid, and the last two and a half years years have been a struggle for the brand. What went wrong?

Thinking about it, it struck me that the big difference between HTC and Samsung is that Samsung has moved on to provide an eco-system of consumer electronic products, both personal (e.g., smartphones, cameras, pads, notebooks) and family (e.g., TVs) that connect and talk together, while HTC has not moved beyond smartphones and pads.

Not only do the various Samsung products talk to each other, but Samsung has launched the Kies software which allows Samsung users to organize and move content easily from one device to another. This is the capability that made Apple such a successful brand in the first place.

The lesson for building a successful consumer electronics brand, then, is not just that one must have good products, but that one needs to be able to offer an integrated eco-system of products that seamlessly connect to each other as well as easy-to-use software that helps the consumer readily acquire, organize, and manage content across devices.

I wonder if HTC is making a move in this direction? I clearly preferred the HTC One smartphone over the Samsung Galaxy S4, when I acquired a new smartphone last year, but I bought the Samsung Galaxy S4, as it made my life overall simpler. I hope your listening, HTC!

Emerging market economies have experienced hard times of late. In India, FY13 GDP growth was the slowest in 10 years and the rupee hit a record low against the US dollar. Many foreign companies are retracting their investments and leaving the government struggling to turn back the tide. Other EM giants Brazil and China have also come under the spotlight as national growth rates plateaued and fell throughout the first quarter of 2014.

However, despite turbulent times in their home markets, the outlook for EM corporations is rosy.

China is sitting on a cash pile of US$3.8 trillion and recent data suggests that its outbound direct investments (ODI) have risen to almost the same level as in-bound foreign direct investment (FDI). If the trend continues, China will soon be a net outbound investor.

One key area for investment could and perhaps should be in acquiring international brands that would enable, particularly the Chinese national champions and the other large players (there are 89 Chinese companies in the latest Fortune Global 500 list), to leap on to the world stage rapidly and without the baggage of the Chinese country-of-origin (see last week’s blog).

The challenge, should we see a spate of such acquisitions, will be integration. The history of Chinese international acquisitions is mixed, much more so than that of companies from its other large Asian neighbor, India. Thus, for instance, TCL acquired Thompson of France back in the early days of this century, an acquisition that almost took it under.

Why did the acquisition fail? On the one hand, TCL’s bet on the rear-projection TV technology, a technology in which Thompson was a leader, did not pan out, as plasma and LCD screens came to dominate that industry. But, equally, TCL struggled with the integration of Thompson in to its business. Cultural differences in many ways proved insurmountable.

So what can Chinese acquirers learn from the much more successful acquisitions undertaken by Indian firms? The most important lesson is, humility is essential. While Chinese firms are arrogant and believe like many Western acquirers, that there is little to learn from the acquired company and that they can improve the performance of the acquired company by implementing their own and superior systems and processes, injecting their superior and more hardworking executives to “run the show”, and doing so at the much faster “China speed” that they are used to, Indian firms acquire with the view to learn what is good from the acquired company, improve what is not so good by injecting their own capabilities, and doing so gradually. In some sense, the old adage of being slow and steady to win the race applies equally to acquisitions.

To take this more humble but successful approach, perhaps the most difficult step will be to learn humility. Swept away by the “China Dream”–an idea that has been around for a while, but now is reaching fever pitch, pushed by the efforts of the current administration under President Xi Jinping–there is a general view of Chinese superiority which blinds acquirers to the superior aspects of the acquired firm, which, ironically, was the reason for the acquisition in the first place!

With humility in place, the rest is relatively easy. You can read more about that in my “The New Emerging Market Multinationals: Four Strategies for Disrupting Markets and Building Brands”. Indeed, a bit of humility and with the right acquisition team and process, Chinese companies could start becoming the acquirers of choice, just as the Indian acquirers have successfully become.