Case study: Australian Gold

The story
Established in 1985, Australian Gold is a fast-growing suncare brand. Sold in more than 50 countries, it is recognised by its mascot “Sydney”, a koala bear riding the waves on a golden brown surfboard. The Australian Gold brand is owned by New Sunshine, a manufacturer of tanning and skincare products, based in Indianapolis, US.

The challenge
Australian Gold decided to extend its outdoor suncare products to the mass market this year. But there were already more than 100 established sunscreen brands including Banana Boat, Coppertone and Hawaiian Tropic, as well as private labels such as Walgreens, CVS and Rite Aid. The goal was, as chief executive Stephen Hilbert put it, to introduce the brand to the American market “in an entertaining, modern, and memorable way”.

The strategy
Australian Gold’s strategy had two components: develop a distinct brand message and communicate it to the public. To differentiate its brand, Australian Gold developed a campaign, ”Live the gold life”, which epitomised beaches, sun and fun. Such lifestyle branding was believed to be more effective than emphasising functional benefits of the product, such as UVA/UVB protection, water resistance and purity.

To ingrain the image of Australian Gold as the “gold life” sunscreen in the minds of consumers, the company took the unorthodox step of partnering with Donald Trump’s popular television show Celebrity Apprentice. Australian Gold sponsored an episode of the show last month in which celebrities developed a campaign for the sunscreen based on the “gold life” concept.

Walmart, Walgreens and CVS carried Australian Gold displays featuring Celebrity Apprentice.

The outcome
The publicity campaign generated significant buzz and media coverage. The TV episode was watched by more than 8m viewers. As a part of the show, Australian Gold sponsored AIDS Project Los Angeles (the charity of choice of the winning team), creating further viewer goodwill toward the brand.

But was positioning Australian Gold as a lifestyle brand a viable strategy? Lifestyle branding has gained popularity among companies, which view it as a way to sidestep competition and connect with customers in a more personal way. This is especially appealing when increasing commoditisation makes product differentiation more challenging.

The problem
Despite its intuitive appeal, lifestyle positioning is not without drawbacks. As more brands adopt lifestyle positioning, they risk of satiating consumers’ need for self-expression. Because this is not product-specific, lifestyle brands can end up competing not only within their own product category but also with lifestyle brands in unrelated product categories. For Australian Gold, this means that it will now compete not only with sunscreen brands but also with apparel brands such as Quicksilver, Rip Curl and Hollister. And, just as the wallets of most consumers have limits, so does their need for self-expression through lifestyle brands.

Key lessons
Lifestyle positioning is a viable way to circumvent product commoditisation by enabling brands to connect with consumers more personally. The main concern is that by choosing lifestyle positioning, brands might trade in-category competition for even fiercer cross-category competition for a share of the “consumer self”.

The success of lifestyle branding depends on a company’s ability to create, differentiate and sustain its lifestyle positioning. If a brand fails to carve a unique niche in a consumer’s mind, its lifestyle strategy might backfire, making it largely irrelevant to consumers.

Competition is no longer bound by product categories: all lifestyle brands compete across categories for a share of consumer identity. Fulfilling consumers’ need for self-expression is becoming the new frontier of brand competition.
- Financial Times, 4 May 2011