Monday, January 11, 2016

Trump’s Campaign Is Damaging His Brand

Donald Trump's most vocal political followers are best described as poorly educated white males who are angry and upset that their America is changing and that they are being left behind in the march of history.  These are exactly the opposite of those whose support Trump's business brand needs to court to thrive in the market place.  As a piece in Politico reports, as Trump's political campaign continues to soar, his business brand is taking a beating that could have long term consequences as Trump alienates the upper income consumer market.  Here are article highlights:

If Donald Trump is nothing else, he’s an American brand. The Trump name adorns luxury condominiums, hotels and golf courses around the world; it has sold a TV show, millions of books, a line of cologne and even, briefly, an airline.

And that brand, according new data published here in Politico Magazine for the first time, is taking a major hit in the wake of his presidential campaign.

But as Trump the candidate has ascended, hitting the top of the polls and staying there thanks to a series of controversial statements and a groundswell of Republican populist support, the opposite has happened to Trump the brand: Among the people Trump’s business depends on—the consumer making over $100,000 a year—the value of the Trump name is collapsing.

A December survey of American consumer opinion, fielded by the BAV Consulting division of advertising and marketing giant Young & Rubicam (and the largest and longest running study of brands in the world), found that since Donald Trump’s run for president, the Trump brand has lost the confidence of the people who can afford to stay at one of his hotels, play at one of his country clubs or purchase a home in one of his developments. It is also rapidly losing its association with the gilded traits Trump has long promoted as the essence of his business.

In categories such as “prestigious,” “upper class” and “glamorous” the Trump name has plummeted among high-income consumers. Within the same group, it is also losing its connection with the terms “leader,” “dynamic” and “innovative”—quite a blow for a man who criticizes others for being “low energy” and considers himself an industry trailblazer.

As a private corporation, the Trump Organization is not obligated to report any such a decline—or to report it accurately—but any CEO will tell you that a brand deterioration like this is likely to have a significant financial impact, affecting sales, borrowing and even efforts to attract high quality employees. 

The first visible signs of the commercial cost associated with Trump’s extreme politics came after his inflammatory comments about undocumented Mexican immigrants, which he made as he announced his candidacy last June. 

Less visible, but no less important, are hits Trump has taken among his target consumer base: the luxury, or “aspirational” market of those making over $100,000 a year. The wealthiest respondents in the BAV survey—those with incomes over $150,000—judge Trump the harshest of any income bracket. In this group, as measured by BAV’s consumer opinion index, Trump’s reputation for being “obliging” and “upper class” has declined by more than 50 percent since the outset of the campaign, followed by “leader” (with a 41 percent decline) and “prestigious” (down by 39 percent). The next lower income level—households making between $100,000 and $150,000—wasn’t much kinder, with a 56 percent decline for “obliging,” a 45 percent decline in “prestigious” and a 38 percent drop for “upper class.”

Donald Trump, as a 69-year-old whose fortune is counted in the billions, will very likely remain wealthy and comfortable—a success as he defines it—for the rest of his days. But those like his children who may have counted on the brand to sustain them further into the future cannot be so certain. 

Then again, they could move into the part of the consumer market where no real damage has been done. Perhaps a Trump brand of smokes, or maybe canned meat? 

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