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Amitava Chattopadhyay


Amitava Chattopadhyay
Emerging Market Multinationals - Amitava Chattopadhyay


Canada

Growing an Industry with Negative Associations: The Case of Cannabis

A recent article in Lift Cannabis News Magazine entitled Cannabis Brand Wars got me thinking about the challenges of building a brand in a stigmatized or “underground” product category such as recreational cannabis.  While recreational cannabis use may have become legal in several US states (e.g., Colorado and Washington), and Canada maybe considering making recreational cannabis use legal, the product still carries negative associations and the image of recreational cannabis users is negative.  As such, building successful mainstream brands in this category and indeed moving the whole category mainstream, to grow the category and the brands within it, poses special challenges.

Thinking about it, it reminded me of parallels with the country-of-origin effect and a case I wrote several years ago on building the LG brand in the US–the parallel between the cannabis industry and the LG brand at the time of its introduction in the US in 2002, is that both are victims of negative stereotyping–Korean products were broadly perceived as second rate in the US at the time, and LG as a Korean brand had to overcome these. One of the key things that the LG brand did as it entered the US market in 2002, aside from significant product innovations (see my case), was to copy key design features of European white goods, as European products were seen as aspirational and superior quality by consumers in the US. LG introduced front-loading machines which was typical of European washing machines (the US brands typically featured top-loading machines which accounted for 90% of the washing machine market at the time). The styling was also deliberately and distinctively European. And, they called the washing machine line Tromm, a derivative of the German word for drum, trommel.  Importantly, their research showed that the name sounded European. These steps helped LG distance itself from its Korean roots and the negative stereotype associated with the category of “Korean products” at the time, and associate itself to a category with positive associations among local US consumers, “European products”. LG washing machines, refrigerators, and the like, went on to become, to quote senior executives at LG with whom I spoke at the time, the “Mercedes Benz” of the white goods industry, commanding the highest ASP and receiving top ratings from both Consumer Reports and the JD Powers Consumer Satisfaction Survey in the mid-2000s.

What can we learn from this for brands in the cannabis industry?  One way to overcome a negative stereotype is to strengthen the mental connections of the target category with a category that has positive associations. Some players in the cannabis industry are doing this. Thus, consider Kiva, a brand that sells cannabis infused confections. To enter their website one needs to indicate if one is over 18 years of age, drawing parallels with websites for alcoholic beverages, a mainstream and “legitimate” product category, in consumers’ minds. Moreover, the product form is a confection and confectionery is a mainstream product category. Consuming chocolates does not have negative connotations and, if anything, current thinking suggests that cocoa butter is healthy.  The consumption method itself also differs from the typical ingestion method associated with cannabis, smoking, which also has a negative connotation today, this further weakens the ties typically associated with the category.

The “About Us” tab on Kiva’s website opens with the sentence “KIVA Confections creates cannabis infused chocolate products and is one of the most recognized medical cannabis companies in California.” (emphasis added), drawing links to the pharmaceutical industry, an industry that is both mainstream and important for consumer health and well-being, the latter being a counterpoint to the negative associations consumers might typically hold about cannabis and cannabis users. This association is strengthened with the mention in the last sentence of the section that Kiva products deliver “certified amounts of medicinal cannabis“. The verbal components are further strengthened through visual images that rotate through the top of the page, images that are reminiscent of the pharmaceutical industry and appear modern and professional.

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The “Products” tab on the website leads to pictures of the products available, which are shown packaged in exclusive looking packages with associations to high quality and gourmet products; associations further reinforced by introducing them as “Artisan Confections”.

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Collectively, such efforts are likely to create strong associations with product categories that are acceptable, legitimate, and mainstream. As these associations become stronger over repeated exposure, they are likely to not-only be the first associations that are retrieved by consumers but they are also likely to crowd-out the extant undesirable associations–see my research on part-list cuing. Over time, as more brands adopt a similar strategy, albeit in a differentiated way, it would be reasonable to see a positive shift in consumers’ view of the cannabis category, its users, and of the brands within the category.

Looking to the future, what are the key focus areas for India’s EMNCs looking to expand globally?

The book talks somewhat about using cheaper labour from abroad (especially in regards to cost leaders). Is there an ethical part of this for EMNC’s or does the ethical side of it come in after they have already been more established in their market?

North American airlines a nightmare

Service levels on North American airlines have become appalling! And I am here referring to pretty much all the carriers I have tried in the recent past, be they United Airlines, American Airlines, or Air Canada.

Let’s start with check in! They close flights one hour before departure time! Not a minute’s grace. I arrived one hour before according to my watch but 58 minutes according to United and was bumped from the flight to Chicago earlier this morning! To boot, a lot of the staff are rude. I was told by the woman at the check-in counter that I had to go stand by as all flights to Chicago were full. I asked if I could be rerouted and the woman at the counter snapped, “No point asking me in different ways, the flights are full!” The odd thing is that she was wrong as two hours later I had been rerouted by a kindly gate agent! United should reward Laura Sharpe, the very helpful lady who is going to get me to Chicago today. Sadly, I cannot remember the name of the rude, incompetent, and unhelpful woman who checked me in this morning at 7:18 am in Vancouver. I guess she just wasn’t a lady. Perhaps if United will see this blog and can put two and two together and kick this woman’s sorry butt out of the company, since all she is doing is getting United a bad name.

Since I knew the next United flight to Chicago was also full, and at the time, I did not have the re-routed flight, I approached Air Canada. The woman at Air Canada didn’t seem to understand that I was willing to buy a fresh ticket, paying hard cold cash to Air Canada! She kept saying that my ticket was on United so she couldn’t help! Incredible, I understand that I speak English with a foreign accent but my students seem to understand my English perfectly well, but the Air Canada employee clearly couldn’t. Perhaps she needs some training in listening or perhaps education in English! More likely, she just couldn’t be bothered to look in her computer if indeed she could take my money and get me to Chicago today.

I am now sitting in the Air Canada lounge and I cannot but help overhear the lady on the next seat having a conversation on the phone with some North American airline representative over the phone. She has moved along in her frustrated conversation to ask for a “manager”. The manager’s comments to her elicited the reaction “you can’t be serious that, that is a rule”. I guess I am not the only person who is frustrated.

I travel a lot on Singapore Airlines. They close the check-in counter only 40 minutes before the flight and the gate just 10 minutes before. Perhaps United, Air Canada, American Airlines and more generally all North American airlines should take courses from SQ and learn how they manage to get their passengers on board without requiring them to come so much earlier!

The moral of the story is don’t fly North American carriers if you can help it. Within North America, sadly there is no option. This is what keeps these hideous carriers afloat. A free market would see them go under.


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