Scaling Authentically-Case Studies
Arizona Iced Tea, LEGO, and Crayola are brands that were able to successfully scale while adhering to the essence of their brands. Below are the findings for this research.
THE 99-CENT CANS OF ARIZONA ICED TEA
- Since the company launched in 1992, Arizona Iced Tea has managed to sell their 23-ounce cans of iced tea for 99 cents. They were able to keep this price despite scaling their production from 150 cans per minute to 15,000 cans per minute.
- Don Vultaggio, the co-founder of the Arizona Beverage Company, believes that the 99-cent price of their tallboy cans has become part of the Arizona Iced Tea identity. In 2016, they were able to sell an estimated US$1.2 billion worth of 99-cent iced tea, making them the second-largest ready-to-drink tea brand in America.
- Arizona manages to maintain the price of their tallboy cans through minimizing costs in places such as production and distribution and foregoing traditional advertising.
- Production costs are minimized by reducing the amount of aluminum they use for the cans by about 50% compared to when the products launched in 1992.
- Distribution costs are minimized by running delivery trucks at night to avoid heavy traffic and utilizing a hybrid distribution model wherein the company delivers some goods itself, others are taken care of by distributors, and some go directly to the warehouses of big chain supermarkets such as Costco and Walmart.
- For advertising, Arizona Iced Tea relies on their brand legacy and social media instead of spending on advertising through other means such as print and TV advertisements, and celebrity endorsements. The brand showcases their signature turquoise cans around the world on Instagram where they have about 180,000 followers.
LEGO AND BEING BUILT ON CREATIVITY & STORYTELLING
- From its inception in 1932 by founder Ole Kirk Kristiansen, the LEGO bricks have received little iterations. The plastic brick design as it is most known for today was first established in 1958.
- Julia Goldin, the Chief Marketing Officer of LEGO, states that their company is mission-driven. They want to "inspire and develop the builders of tomorrow."
- In an attempt to increase their sales and media presence, LEGO branched out to new product ideas. Their new product ideas, however, were not very successful at first as their early attempts of branching out were met with disappointing results.
- They attempted to launch a cartoon series called "Jack Stone" and a live-action series called "Galidor: Defenders of the Outer Dimensions," however, both shows were not successful and cost the company a hefty amount. They also tried to make LEGOs that catered to girls, however, they used a new system for these lines instead of the normal LEGO bricks which lead to another sour reception.
- It was in the early 2000s when the LEGO company finally began to understand that in order to successfully scale their company, they would have to tell stories that are relatable to children and appeals to their creativity and imagination. This lead to the creation of product lines such as LEGO Bionicles and Ninjago, both lines seeing success and driving revenue for the company.
- LEGO has since spawned products beyond toys such as movies and video games that successfully portray the brand's identity of story-telling and creativity.
- The LEGO company also finds user-generated content such as those found on Youtube valuable. In fact, the most subscribed branded channel on Youtube belongs to LEGO with 5 million subscribers.
- LEGO is currently the world's most valuable toy brand being valued at US$7.571 billion as of 2018.
CRAYOLA AND UNLEASHING ORIGINALITY
- The essence of the Crayola brand, according to the company, is in "unleashing the originality in every child."
- In 2017, Crayola decided to make a new hue for their 24-count box and get rid of another. They ran a contest on social media to allow one person to name this new hue. This campaign led to a strong surge of consumer engagement, receiving upwards of 300,000 consumer suggestions for the name of the new hue.
- In 2018, Crayola used augmented reality (AR) technology to run a campaign that allowed consumers to send festive messages to other people. Videos shared by people through this campaign garnered an 8% click-through rate and 62% view-to-completion rate across all social media. The total views received by videos created with this campaign reached up to 330,000.
- Both of these are examples of how Crayola was able to increase its media presence while staying true to the essence of its brand.