Monday 24 August 2015

The Value of the Trump Brand: “What is the Brand’s Message”

In the United States, the race for the presidency is heating up.  Donald Trump, the upstart candidate with very little to no political experience, is the front runner for the Republican Party nomination.  Trump has been well known for his real estate holdings and his appearances on the television show The Apprentice, but now is also known for his divisive views concerning immigration in the United States.  In June, Trump made numerous comments concerning immigrants from Mexico, including stating that some of them were “rapists.”  The backlash was fast and severe (rightly so).  In a July 2, 2015 article in The Atlantic, titled, “Is Running for President Donald Trump’s Worst Business Decision,” the author, David A. Graham, reviews some of the response from the business community as does the blog, The Gawker.  Univision quickly refused to show Trump’s Miss USA Pageant.  NBC Universal made the same decision and noted that Trump would not appear on its show The Apprentice.  Macy’s decided to end a line of Trump clothing.  Serta similarly decided to end a Trump branded mattress.  NASCAR, ESPN and the PGA will not hold events at Trump branded golf courses/hotels.  The League of United Latin American Citizens (LULAC) issued a press release condemning Trump and applauding Univision and NBC Universal’s actions. 
In The Atlantic article, Mr. Graham notes that Trump is supposedly worth around $9 billion—according to Trump.  According to a Slate article authored by Jordan Weissmann, about $3.3 billion of that $9 billion is supposed to be the value of the “Trump brand.”  Wow!  That is quite a valuation.  I wonder what it was based on.  Mr. Weissmann notes that some hotels will pay Trump to use the Trump name on the hotel—Trump actually doesn’t own the hotel itself.  Forbes puts the brand closer to around $125 million.  That is still quite a high valuation.  And, it is not entirely clear how Forbes arrived at that number.  (The branding deals with Serta, Macy's and hotels?)
In recent weeks, Trump has maintained his lead as the Republican front runner.  Notably, The New York Times, in Why Donald Trump Won’t Fold: Polls and People Speak, recently examined polling data and concluded:
A review of public polling, extensive interviews with a host of his supporters in two states and a new private survey that tracks voting records all point to the conclusion that Mr. Trump has built a broad, demographically and ideologically diverse coalition, constructed around personality, not substance, that bridges demographic and political divides. In doing so, he has effectively insulated himself from the consequences of startling statements that might instantly doom rival candidates.
In poll after poll of Republicans, Mr. Trump leads among women, despite having used terms like “fat pigs” and “disgusting animals” to denigrate some of them. He leads among evangelical Christians, despite saying he had never had a reason to ask God for forgiveness. He leads among moderates and college-educated voters, despite a populist and anti-immigrant message thought to resonate most with conservatives and less-affluent voters. He leads among the most frequent, likely voters, even though his appeal is greatest among those with little history of voting.  . . .
His support is not tethered to a single issue or sentiment: immigration, economic anxiety or an anti-establishment mood. Those factors may have created conditions for his candidacy to thrive, but his personality, celebrity and boldness, not merely his populism and policy stances, have let him take advantage of them.
Tellingly, when asked to explain support for Mr. Trump in their own words, voters of varying backgrounds used much the same language, calling him “ballsy” and saying they admired that he “tells it like it is” and relished how he “isn’t politically correct.”
Trumpism, the data and interviews suggest, is an attitude, not an ideology.
I am sure that some of his comments have not helped the value of his brand as I believe corporate sponsors will likely continue to run from him.  I am not even sure what his brand will stand for after this is all over—not just opulence for sure.  However, his general popularity is growing in certain circles—how many of those folks will play golf on Trump’s courses?  For more on the “math” behind Trump’s valuation of himself, see Forbes here. 

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