Case Study:
Hello Kitty: Can the cartoon cat survive the buzz across the world?
When, in 1974, employees at the Japanese design company Sanrio created Hello Kitty (www.sanrio.com/ characters/HelloKitty/), the small, rounded cartoon cat with a red bow between her ears and no mouth, they could never have dreamt that she would become the global megastar she is today. Sales of Hello Kitty merchandise now account for approximately one third of Saniro’s app. 3650 million annual turnover and her face adorns 50,000 products, sold in more than 60 countries. History Hello Kitty was created with the focus of being a small gift, whatever the product is. The unique selling proposition (USP) has always been ‘small gift, big smile’. Hello Kitty’s creator started out as the Japanese equivalent of Hallmark cards. Sanrio was founded by Shintaro Tsuji in 1960; Tsuji, a qualified chemist, lost his mother when he was 13 and spent an unhappy childhood with reluctant relatives. He attended a kindergarten run by a Canadian missionary and saw for the first time the custom of birthdays, which were not traditionally celebrated in Japan. He decided he would use his company to foster the culture of gift-giving. The little half-Japanese, half-English cat has become so globally recognizable that it is, perhaps, inevitable that the Japanese board of tourism has appointed her their official tourism ambassador to China and Hong Kong. This is not the first time the world has looked to Hello Kitty to perform an ambassadorial role; she has been United States children’s ambassador for UNICEF since 1983. As an experiment in 1971, in the wake of student riots, the company began printing rounded, cutesy images on previously blank writing stationery and in 1974, Hello Kitty was drawn. She was drawn without a mouth, which later made her the perfect crosscultural representative. She wasn’t given a mouth, because she speaks from the heart. She’s Sanrio’s ambassador to the world and isn’t bound to any particular language.
Hello Kitty was made partly English because when she was first drawn, foreign, especially English, associations, were particularly popular. The Hello Kitty stationery (pencils, pencil cases, ballpoints pens, paper) and diaries were a hit among schoolgirls during the 1980s and the company soon branched out in to other fancy goods. In the 1990s, Hello Kitty had a second level at fame as it was was re-marketed as a ‘retro’ brand. Shops, run by the outlet label Vivitix, marketed Hello Kitty to teens and adults, appealing to their sense of nostalgia. As eight-year-olds they would have used Hello Kitty pencils and pencil cases in the classroom; in their late teens and early twenties, they reached for Hello Kitty satchels and make-up mirrors. Hello Kitty stands for the innocence and sincerity of childhood and the simplicity of the world. Women and girls all over the world are happy to buy in to the image of the trusting, loving childhood in a safe neighbourhood that Hello Kitty represents. They don’t want to let go of that image, so as they grow up, they hang onto Hello Kitty out of nostalgic longing – as if by keeping a symbolic object, they can somehow keep hold of a fragment of their childhood self. Now, although originally conceived as a character that would appeal to pre-teen girls, Hello Kitty is no longer regarded as being for children only. Along with the likes of Coca-Cola and Nike, she has become a brand phenomenon. Hello Kitty is technically just one character who inhabits an entire, fictional world dreamt up by Sanrio. She lives in cyberspace (on the fondant-coloured Sanriotown website, www.sanrio.com/characters/ HelloKitty/). Hello Kitty has her own birthday, 1 November (which makes her a Scorpio) and, as her English heritage befits, she lives in London with her parents and twin sister, Mimmy. Her many hobbies include travelling, music, reading and ‘eating yummy cookies her sister Mimmy bakes’. Other characters who share Hello Kitty’s world include Dear Daniel, Kathy, Tippy and Thomas. Sanrio’s theme park, Puroland, opened in 1990; it features Sanrio’s most popular characters, with Hello Kitty as its star draw, and with yearly figures of 1.5 million visitors from around the world, it is one of Japan’s most popular visitor attractions. Hello Kitty even became an animated character. She first appeared on the American-animated Hello Kitty’s Furry Tale Theater, which was shown on US television throughout 1987. Another series ran in 1991. When Hello Kitty was first marketed to the US, the cultural differences meant that changes to the Japanese version had to be made. Sanrio’s market research showed American consumers responded best to pink and purple kitties and worst to anything blue, yellow or red. The American audience also took against one of Hello Kitty’s friends, a little snail, which had to be eliminated from the merchandise. However, Sanrio got it right in the end and now there are no differences in the American and Japanese lines of merchandise. Indeed, when Sanrio tried to customise Hello Kitty for its Taiwanese and Hong Kong markets, putting her in local dress and in local surroundings, the products did not sell. Her mixed English-Japanese heritage was part of her charm. Hello Kitty business today Its primary business is making and marketing what it calls social communication gifts. The company also operates restaurants and two theme parks in Japan, produces movies and publishes books and magazines – all based on its multitude of cute characters. Sanrio licenses or sells thousands of items – including Hello Kitty stationery, school and desk accessories, clothing, cosmetics, and room decor – that turn up for sale around the world. Over 4,000 stores sell the products in the Americas alone, including some 200 Sanrio boutiques. There are more than 50,000 licensed Hello Kitty products total available in 60 countries worldwide. There are 500 new Hello Kitty products launched around the world each month and 500 products are discontinued. The idea is to change the product range in order to match different and emerging marketing, business and cultural trends across the world. In China Sanrio operates about 100 shops. Sanrio also partners with artists to make speciality products, such as nail artist Eriko Kurosaki’s 2007 Hello Kitty collection. Some time ago Sanrio signed a deal with Sony Ericsson for their mobile phone. Just recently Sanrio signed a licensing deal with iPod manufacturer, Apple, which has launched a range of Hello Kitty branded products. Mobile phones are attractive products for the Hello Kitty brand: children are now using mobiles as much as teenagers and adults. Mobiles or smartphones are objects that everybody has in their pocket and it is always seen. In May 2008 Sanrio announced the formation of the Global Consumer Products division to build on the company’s efforts in licensing, new productdevelopment, and co-branding partnerships. To that end, it has formed a partnership to open a theme park in Taiwan. Sanrio already operates a pair of ‘Hello Kitty’ theme parks in Japan and hopes to cut similar deals.
Marketing and advertising While the licensing partners may advertise the Hello Kitty products, Sanrio relies purely on its partners’ marketing and word of mouth. Hello Kitty don’t rely on animations, films or film shows to be promoted and is probably one of the only brands in the world that rely solely on the partners’ advertising and word of mouth. Licensing Normally licensing is done as a very technical and commercial deal. However, Sanrio is very involved with the creative side and its decisions to work with certain licensee partners are more about their ability to create Hello Kitty products which appeal to the loyal consumer and protect what the brand stands for. Competition Sanrio does not tend to worry much about competition, as the Hello Kitty has been out there as a brand for more than 30 years. However, Sanrio has respect for a newcomer such as Don Ed Harry, who is an American tattoo artist born and raised in Southern California. Hardy is recognized for incorporating Japanese tattoo aesthetic and technique into his work. For example, in 2004, French fashion designer Christian Audigier licensed the rights to produce the high-end Ed Hardy clothing line, which is based on Hardy’s imagery (Varley, 2009). Sales figures The company’s sales in Japan and United States have been declining, while the products have continued to grow in popularity in Europe, Asia and Brazil. In 2008 the sales in Japan fell 28 per cent to approximately 3180 million. However, in Europe sales rose 62 per cent to approximately 335 million. Sanrio blamed falling birth rates, unseasonable weather and a saturated market for its dip domestically. Sales in North America were also down in the fiscal year 2008 due to the softening economy and financial crises and a flawed product strategy for Christmas. Traffic at its two theme parks is down despite the addition of new attractions. The company blamed a reduction of group discounts for this decline. Despite the current problems, Sanrio is confident that the Hello Kitty phenomenon is not over yet. Only the future will tell whether the speechless but iconic cat will be heard for the coming decades, but currently its brand equity serves as a solid business platform for Sanrio.
Q1. Do you think that Hello Kitty will continue to rule the world? What are the pros and cons?
Q2. What are the reasons that Hello Kitty is licensed to so many different product manufacturers?
Q3. Suggest the future licensing strategy for Hello Kitty.
Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.