Under the Influence with Terry O'Reilly - S2E10 - Billion Dollar Brands

Episode Date: March 10, 2013

There are millions of successful brands in the world, but very few of them are in the exclusive billion dollar club. We'll test your ability to guess which brands in your life are the billion-dollar ones, and we'll tell you which of P&G's brands reached $10 billion first, which cookie is worth a cool billion, which Hollywood movie star is has sold the most tickets, and which NHL franchise is the only billion-dollar team in the league. Join us as we look at the mega brands that outsell all the others.The list may just surprise you. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. From the Under the Influence digital box set, this episode is from Season 2, 2013. You're so king in it. You're going to love it in an instant. Your teeth look whiter than noon, noon, noon. You're going to love it in an instant. You're a decent waiter that no, no, no.

You're not you when you're hungry. You're in good hands with us. You're under the influence with Terry O'Reilly. At last count, there were 7 billion people on the planet in 2012. But 1,226 of them are especially unique, because they are billionaires. The Billionaires Club is extremely exclusive, and depending on the economy, the list can fluctuate. Forbes has been tracking billionaires since 1987 and tells some interesting stories about them. Bill Gates, for example, first hit the top of the billionaires list in 1995 with a net worth of $12.9 billion.

But that wasn't his best year. In 1999, he was worth $90 billion. Today, Mr. Gates is poorer and is only worth $61 billion. In 1987, there were only 140 billionaires in the world. Five years later, the number of billionaires in the United States alone passed 100 for the first time. And it would be another 20 years before any other country could match that number. Russia produced its first four billionaires in 1997, and the Forbes billionaire list surged to 486 people. Three years later, with the U.S. economy on fire,

seven of the top ten billionaires were American. Among them were the founders of Amazon and Yahoo. But maybe one of the most fascinating aspects of the billionaires list are the surprising names on it. We all know that Oprah Winfrey is the first African-American woman on the list, and the founders of Google and Facebook have bank accounts that look like long-distance phone numbers. But did you know that the Regal Brothers are on the list? Who are the Regal Brothers, you ask?

They invented gummy bears. James Dyson is happy to say his life sucks. He's the billionaire who invented the Dyson vacuum cleaner. Michelle Ferrero is on the list. His company makes Tic Tacs and Kinder chocolate eggs. Andrei Melnichenko is on the list. He's a Russian billionaire who deals in fertilizer. And Sarah Blakely is on the list.

At 29, she took her life savings and invested them in the invention of a product to make women look slimmer. Six months later, the former Disney World ride greeter launched her product. She called it Spanx. I like them.

They're comfortable. Looking good, mister. Sarah Blakely owns her company 100%, has never taken an outside investment, and at 41, is the youngest self-made female billionaire in the world. By the way, Forbes has another billionaire's list.

It's called the Fictional 15, and it lists the richest fictional billionaires. Flint Hart Glomgold is on there. You might remember him as Scrooge McDuck's arch-nemesis. Why, I've got more money-making ability in my pinky than you have in your whole soggy body. That's not true. The day I canna run golden rings around you,

I'll eat your stupid hat. Scrooge McDuck and Flint Hart Glomgold bet their entire fortunes on an around-the-world race, and Glomgold bet their entire fortunes on and around the world race, and Glomgold won. His net worth now? $59.1 billion. Knocking Scrooge off not only the number one spot, but off the entire list this year. Come and listen to my story about a man named Jed. A poor mountaineer barely kept his family fed.

And then one day he was shooting at some food, and up through the ground come a bubbling crude. Jed Clampett is on the list. The oil billionaire loaded up his truck and moved to Beverly, Hills that is, and amassed a fortune of $9.8 billion. Tony Stark is next. Forbes estimates Iron Man's worth at $9.3 billion. Then, of course, there's Richie Rich.

The poor little rich boy, who was created by Harvey Comics in 1953, has $8.9 billion in the pockets of his short pants. So I never went back to work for Lieutenant Dan. Though he did take care of my Bubba Gump money. He got me invested in some kind of fruit company. And so then I got a call from him saying, we don't have to worry about money no more. And I said, that's good.

One less thing. One of the most surprising fictional names on that list was Forrest Gump. That fruit company was, of course, Apple. And Mr. Gump's net worth, as a result of investing in the computer company, is calculated by Forbes at around $5.7 billion. The marketing industry has its own list of billionaires. But I'm not referring to the titans of industry. I'm talking about the brands themselves. The list

of billion-dollar brands is just as exclusive as the billionaire's list. Very few brands in the world ever cross the billion-dollar mark. They are products that seem to have some special magic. And some of those brands just might surprise you. You're under the influence. I need money There are millions of brands in the world, and hundreds of them directly touch our lives every day. There are small brands and global brands, but there are very few billion-dollar brands, ones that do a billion dollars dollars worth of business a year.

Procter & Gamble, or P&G, is one of the largest consumer product companies in the world. It manufactures and distributes over 300 different brands, and there is at least one P&G product in 98% of the homes in North America. Yet of those 300 brands, 26 of them stand above the rest because they are the billion-dollar brands. Of North American companies, P&G has the most billion-dollar brands. To give you some context,

PepsiCo has 22, Coke has 15, and Kraft has 12. Yes, the billion- Dollar Club is very exclusive. Time for a P&G quiz. Of the following billion dollar brands, which do you think reached the billion dollar mark the fastest in P&G history? Tide Detergent,

Crest Toothpaste, Gillette Fusion Blades or Head & Shoulder Shampoo? Answer. Gillette Fusion Blades. Launched in 2006, the Fusion shaving blade line achieved $1 billion within two years, reaching that milestone faster than any other brand in P&G's history. Kind of surprising, isn't it?

Fusion is now the top-selling blade in the world. But the way Fusion achieved that status is most interesting. Gillette was a 100-year-old company in 2005, with an estimated market share of over 70% worldwide. That very year, P&G shocked the business world by purchasing Gillette for $57 billion. It was the largest acquisition in the consumer goods industry. Up until 2005, Gillette's top-selling brand was the Mach 3 Turbo. So when the Fusion 5 blade razor line was launched,

there was only one way it could become successful. It had to cannibalize the Mach 3 Turbo. A company cannibalizing its own brand is a rare occurrence in marketing. Brands are so valuable and so expensive to establish, most companies wouldn't dream of attacking one of its own leading products. They have enough on their hands defending attacks from competitors.

But P&G decided to mount a full-scale assault on its own Mach 3 turbo blades by telling people that the new Fusion line was better, which, by the way, was priced 40% higher than the Mach 3. In a man-on-the-street advertising campaign, real people were asked to participate in a face-off, pitting their Mach 3 turbo blade against the new Fusion ProGlide. Now we're hitting the road with the ProGlide Challenge! Tall guy, come on up here!

So which razor do you use? Mach 3 Turbo. It's smooth, it's close shave. I'm a creature of habit. It's a face- you use Mach 3 turbo it's smooth it's close shave I'm a creature of habit it's a face-off Mach 3 turbo versus pro glide fusion pro glide is engineered with Gillette's thinnest blades ever so it glides for less tug and pull feels a lot better than the Mach 3 I'm sold take the pro guide challenge and for enhanced glide try try new Fusion ProGlide Shave Gel. It was a bold marketing move on behalf of P&G.

Over 600 million men around the world use P&G blades every day. But P&G made a very insightful marketing decision. They decided to try to convince their existing customers to step up from the Mach 3 line to the more profitable Fusion line. I always find this strategy so smart. Instead of trying to find new customers, they focused on converting existing customers. Most marketers want new customers, which is the most expensive marketing strategy there is. It means starting from scratch.

It's a ground zero proposition. Whereas converting existing customers to a new product is much more affordable. It's a warm call, not a cold one. Existing customers already like you. You have built-in, embedded ways of talking to them already. And the conversion rates are always better. P&G even created a commercial showing Tiger Woods, Derek Jeter and Roger Federer

knocking Mach 3 blades out of customers' hands with a golf ball, a baseball and a tennis ball respectively. Cannibalization was the strategy. The fastest $1 billion brand in P&G history was the result. Here's another quiz. Which of the following products became P&G's first $10 billion brand? Tide, Crest, Pampers, or Charmin? If you guessed Pampers, you're right. Again, kind of surprising considering Pampers is the youngest brand in that list. Crest was launched in 1955, Tide in 1946, Charmin, believe it or not, was squeezed into existence in 1928,

but Pampers was born in 1961. Five years before that, P&G researcher Vic Mills was changing his grandson's messy cloth diaper and uttered the million-dollar phrase, or should I say the ten-billion-dollar phrase, There has got to be a better way. So Vic and his fellow P&G researchers rolled up their sleeves to try and develop an affordable, better fitting, more absorbent, disposable diaper. Then, in 1961, after many trials and redesigns,

the product was ready to hit the market. P&G tapped its ad agency, Benton & Bowles, to design the label and come up with a name. Creative director Alfred Goldman suggested Pampers. By 1964, Pampers was granted a patent by the United States. By 1969, it was the first nationally sold disposable diaper. And ten years after that, Pampers was distributed around the world. Today, 25 million babies wear them every day. Diapers are a big

market. A baby goes through 5,000 to 7,000 diapers in the first two years of life. One of the secrets of Pampers' success is its advertising strategy. Instead of marketing the diaper's many benefits, such as absorbency, fit, and ease of use, P&G aims at parents' hearts instead. It focuses on sleep, that a dry diaper means a baby that sleeps through the night, and if you follow that through to its logical conclusion, it means parents that sleep through the night. That is a strategy that crosses all borders. In China, for instance, using diapers was alien to the culture.

So, Pampers took their sleep strategy and renamed it Golden Sleep. Stressing the message that a good night's sleep was crucial to mental development in children, So Pampers took their sleep strategy and renamed it Golden Sleep. Stressing the message that a good night's sleep was crucial to mental development in children, Chinese parents were asked to take pictures of their sleeping babies. Pampers then created a massive montage in Shanghai made up of over 200,000 photos. As a result, Pampers' sales grew by 54%, and the brand is now dominant in China. Here in North America, Pampers also has a big online presence, acknowledging the fact that the first generation of fully digital moms has grown up. Moms who use Facebook to post birth announcements and tweet from delivery rooms.

One of the biggest tasks for Pampers is to become more environmentally responsible. One of the ways it's doing that is with removable, flushable inserts inside semi-permanent diapers. In a recent Top 100 Global Brands listing, Pampers ranked number 31, ahead of Nintendo, with a total value of $19 billion. That means, if Pampers was a standalone company, it would rank number 266 on the Forbes 500 list of the largest corporations. It is P&G's biggest selling brand. Who knew?

And we'll be right back. If you're looking for flexible workouts, Peloton's got you covered. Summer runs or playoff season meditations, whatever your vibe, Peloton has thousands of classes built to push you. We know how life goes. New father, new routines, new locations. What matters is that you have something there to adapt with you, whether you need a challenge or rest.

And Peloton has everything you need, whenever you need it. Find your push. Find your power. Peloton. Visit Peloton at onepeloton. Quiz. According to Forbes, only one NHL team is worth $1 billion. Is it

the Toronto Maple Leafs, the New York Rangers, the Montreal Canadiens, or the Chicago Blackhawks? Your guess? Answer. The Toronto Maple Leafs. I know, I know, it doesn't seem right.

A team that hasn't won a Stanley Cup since 1967. A team that hasn't made the playoffs in almost a decade. But it's true. According to Forbes, the Toronto Maple Leafs are a billion-dollar brand. The New York Rangers weigh in at $750 million, the Canadians at $575 million, and the Blackhawks at $375 million. Yes, the Leafs...

Boo! Easy now. The Leafs are the league's most valuable franchise. Interesting to note that according to Forbes, the NHL's three most profitable teams, the Leafs, the Rangers, and the Canadiens, account for 83% of the league's income. And a whopping 13 of the 30 NHL teams lost money last year.

It's a rare occurrence to have a category's most valuable brand be one of its worst performers. It's almost impossible to find a parallel in the world of business. And even though fans have a love-hate relationship with the Leafs, it goes to prove one rule of marketing. How much a brand is loved by its fans is a huge part of its equity.

Next question, class. Who is the highest grossing movie star of all time? Is it Tom Hanks, Samuel L. Jackson, Tom Cruise, or Harrison Ford? If you said Tom Cruise, you're wrong. But if you said Tom Hanks, you'd still be wrong.

Answer? According to the Guinness Book of World Records, the highest grossing actor of all time is Samuel L. Jackson. Surprising, isn't it? The 62-year-old actor has appeared in movies that have grossed an astounding $7.4 billion over the span of his career. They include Jurassic Park, Star Wars, Pulp Fiction, Snakes on a Plane, The Incredibles, and The Avengers.

Yes, Samuel L. Jackson is the number one Hollywood billion-dollar brand. Which of the following fashion companies is a billion-dollar brand? Ralph Lauren, Louis Vuitton, the Olsen twins, or Giorgio Armani? Answer? All of them. But one of these things doesn't belong with the others. Could it be the Olsen twins? You may remember them from the sitcom Full House.

Twins Mary-Kate and Ashley Olsen took turns portraying the character of Michelle Tanner on Full House from 1987, when they were nine months old, until 1995. With the huge success of the show, the twins at six years of age started a company called Dual Star with the help of their manager.

I remember what I was doing at six years of age. Exactly. But at six, the Olsen twins already had an agent, a hit TV show, and a bank account. Originally, Dual Star focused strictly on entertainment. It produced a series of 50 direct-to-video shows all starring the Olsen twins,

which made Dual Star the leading provider of family entertainment to Warner Home Video. Eventually, the Mary-Kate-and-Ashley brand expanded to include books, CDs, video games, and dolls that went into a dozen international markets. Just like you were doing when you were six. Right, Keith?

Not. When the Olsen twins turned 18, they bought out their partners and took control of Dualstar. They appointed a new CEO and began to steer the company into fashion. Within five years, they had won the prestigious American Women's Wear Designer of the Year Award, beating out competition like Marc Jacobs. Today, Dualstar is one of the top brands in affordable designer fashions aimed at the tween market,

age 5 to 12. Apparel now represents more than 80% of the company's business, and it's found in over 3,000 Walmart stores across the U.S. and in more than 5,300 retail outlets in 12 different countries. The Olsens have now added a young women's line of contemporary clothing called The Row,

which launched in Vogue magazine. They are elbow deep in designing all of their products and approve everything that goes out the door. Time magazine ranked them number four on their Women in Fashion Who's Got the Power list. USA Today praised their success in pioneering the tween market, and the twins have even been lauded by designers Karl Lagerfeld and Michael Kors for their influence in fashion trends. Dualstar has revenues of over $1.5 billion. In my books,

that is a full house. Time for one last quiz. Can you name the number one cookie in the world? Here's a hint. It was created the same year the Titanic sank, and

70 million of them are eaten every day. Give up? It's the Oreo. Oh, oh, oh, my best friend and an Oreo cookie. She loves the crunchy chocolate, I like the creamy middles. Been eating them this way since we were very little. We'll always be friends with O-R-E-O. Friends are better when you pair them.

The first Oreo cookie was made in 1912 at the Nabisco Bakery on West 15th Street in New York, which is now named Oreo Way. The first ad for Oreos appeared on trolley cars in 1923 and it showed people how to twist an Oreo cookie open. You might be interested to know that 50% of all Oreo fans pull them apart

before eating them. And women twist them open more often than men. As a matter of fact, Oreos were aimed at women until 1968 when the strategy changed to kids. the little boy wanted something to have with his Oreo cookies. So there was milk, and then something to keep the milk in, a cow, and a farm to keep the cow on, and then houses sprang up and cities, and well, you know the rest. A lot can happen with an Oreo cream sandwich baked by Nabisco.

In a 1999 survey conducted to mark the turn of the millennium, people were asked which items they definitely wanted to see continue into the next century. 86% chose Oreo cookies, which ranked second only to newspapers. Oreo, now owned by Kraft, is one of the company's $12 billion brands. When I went to the Oreo Facebook page,

it had 31 million likes. How many likes do we have on our Under the Influence Facebook page, Keith? 1,624. Watch out, Oreo. We're coming for you. If you're looking for flexible workouts, Peloton's got you covered. Summer runs or playoff season meditations, whatever your vibe, Peloton has thousands of classes built to push you. We know how life goes. New father, new routines, new locations. What matters is that you have something there to adapt with you,

whether you need a challenge or rest. And Peloton has everything you need, whenever you need it. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. There are many, many successful brands in the world. Brands that do hundreds of millions of dollars in business a year. But very few ever crack the billion-dollar mark. It's always interesting to look at the ones that do, because it's not just the marketing that propels them. There are lesser brands with bigger marketing budgets out there.

It's that we, the public, see something in those products that compels us to purchase them over and over again. For millions of men, a smooth, septic pencil-free shave is worth paying a premium for every day. Say what you will about snakes on a plane, but moviegoers love to see Samuel L. Jackson on the big screen. And whether or not you liked Full House, you'll have to admit the Olsen twins know what they're doing. Then there's the humble Oreo cookie. It's one of those brands that

just chugs along, quietly making billions of dollars. I'll bet the milk industry loves them as much as kids do. And who knew that Pampers would be P&G's most successful product ever? But the promise of a good night's sleep is a profitable one. I guess you could say that Pampers won the race to the bottom. It's a strategy that didn't hurt the Leafs either when you're under the influence. I'm Terry O'Reilly. Hello, Terry? Just listened to your Billion Dollar Brands episode. Most interesting.

Question. If the Boomer Babies made Pampers the first Billion Dollar Brand, I wonder if the Aging Boomers will make Depends Diapers the next Billion Dollar Brand. You know, I was just thinking out loud. Under the Influence was produced at Pirate Toronto. Sound Engineer, Keith Ullman. Theme music by Ari Posner and Ian Lefevre. Series coordinator, Debbie O'Reilly. Research, James Gangle.

See our website at cbc.ca slash under the influence for all the visual elements from this episode, including bonus material. And feel free to like us on Facebook so we can teach Oreo cookies a thing or two. See you next week.