Lifestyle Branding Taekwondo Schools

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October 15, 2011 Lifestyle Branding: A Contemporary Strategy for Taekwondo Schools in the 21 st Century MBA 8649 – Consumer Psychology Villanova University

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Describes the evolving image of Taekwondo in the past 40 years, the problems facing the industry today, and a strategic solution to resolve them.

Transcript of Lifestyle Branding Taekwondo Schools

Page 1: Lifestyle Branding Taekwondo Schools

October 15, 2011

Lifestyle Branding: A Contemporary Strategy for Taekwondo Schools in the 21st Century

MBA 8649 – Consumer Psychology

Villanova University

Thomas Pham

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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.

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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 (Te r r aza s , 2009 ) . 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 (Burd i ck , 2009 ) . 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 Korean-

Americans 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

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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” (Yas in , Noor & Mohamad , 2007 ) . 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.

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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 non-

Asian 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

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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

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(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). Self-

expressive 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

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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

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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.

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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:

DisciplineCourtesyStrengthMoralEffective

RespectSelf-controlCourageHonorAwareness

IntegrityHonestyPerseveranceResolveDiligence

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

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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.

Image 1. Image 2.

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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.

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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 high-

pressure 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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