Michael Jackson's life was a rollercoaster. Before the 21st century, his childhood was filled with misfortune. However, upon reaching his youth and showcasing his musical talent, he charged ahead, reaching his peak in the 90s and becoming the undisputed most famous singer worldwide.
But his life took a nosedive in the early 21st century. Several children, invited to visit his Neverland Ranch, accused him of child molestation, leading to investigations by various institutions and a drastic decline in his reputation.
Dozens of brands that had signed endorsement deals with him withdrew their investments and demanded huge compensation. According to their endorsement contracts, if an artist's personal issues caused damage to a company's reputation, the artist would be liable for substantial compensation to cover the company's losses in reputation.
Even worse, the entire music industry in America blacklisted him. It was a case of "when the wall falls, everyone pushes, and when the drum is broken, everyone hammers." Seeing Michael Jackson in distress, both his predecessors and successors in the music industry attempted to eliminate him.
After all, senior artists disliked a junior artist surpassing them, while junior artists didn't want a deity dominating them. Thus, everything happened with perfect timing, and Michael Jackson lost almost everything in those two years.
What was even more devastating was that these circumstances led to severe financial problems. Although Michael Jackson earned a vast amount of money, he was also a big spender. Once his income was cut off during his difficult times, he couldn't afford a single penny. Eventually, he was forced to auction off his Neverland Ranch to pay off his debts.
Therefore, at a time when he was banned across America and numerous corporations were avoiding Michael Jackson like the plague, a company was willing to invite him to be their global spokesperson. This was undoubtedly another major news event, immediately topping all headlines.
However, this endorsement was met with mixed reactions. Many who firmly believed Michael Jackson was a child molester angrily denounced vivo phones as an unethical company on the internet and in the media. Several celebrities also condemned the decision, and some unrelated companies even planned to impose sanctions on vivo.
Some Americans even went to the White House website to petition the government to discipline a company that supported a pedophile, and for a time, vivo was met with a torrent of criticism.
Of course, Michael Jackson's supporters also raised their banners high, trying to protect the new endorser their idol had finally secured, leading to various online battles.
Under normal circumstances, a company would never do something like inviting Michael Jackson to be a platform endorser. After all, any brand aims to capture the largest market share and does not wish to offend the majority.
As long as a celebrity has a scandal, regardless of whether it's true or false, it will inevitably provoke dissatisfaction among a portion of potential users, and such an action is equivalent to losing those dissatisfied users.
While this might gain the support of some fans, the fans of any celebrity are a minority compared to the general public. Even for a top idol like Michael Jackson, his fans in America only accounted for about 3%, with 97% being casual observers.
These people might not hate Michael Jackson, but if they learned about such a scandal, they would instinctively choose to avoid him.
Therefore, no normal company would hire a celebrity with a scandal for endorsement, as it means losing 97% of public goodwill. Even if the celebrity is a global superstar, it's the same!
After all, there is no shortage of world-class celebrities in this world. As long as you have money, why not hire another world-class celebrity without scandals? Can't you achieve the same effect?
But vivo took the opposite approach this time, which indeed puzzled many. In fact, even Chen Yongming was somewhat reluctant. If it weren't for Mr. Huang's insistence that vivo have Michael Jackson as its spokesperson!
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"For just 20 million dollars, Michael Jackson can be your brand's spokesperson for a full five years. Two years ago, you couldn't get him for even 200 million!" Mr. Huang said casually during a phone conversation.
"But our brand's reputation will be ruined!" Chen Yongming said helplessly.
"There's no way around it. Who told you to take a completely different route from Zhong Mi?" Mr. Huang said lightly. "Since you don't want to compete based on price and want to gain market share through differentiation, you have to take a gamble!"
From the pricing of vivo phones and Zhong Mi, it's evident that Chen Yongming has ambitions. He wants to be a brand that isn't so low-end, wanting to follow a different brand route from Lei Jun.
Lei Jun and Zhong Mi's brand route is very simple and easy to understand: engage in price wars, bring products to an unbelievably low price, create unbeatable cost-effectiveness, and ultimately seize the entire market.
This strategy has been proven correct by countless historical practices. For example, the historical Xiaomi, when all smartphones were priced above 4,000 yuan, Xiaomi was priced at only 1,999 yuan, resulting in a resounding success and making it the current third-largest smartphone manufacturer globally.
Lei Jun in this world still intends to follow the same path, and even more aggressively.
To be honest, Zhong Mi phones' pricing of 240 dollars is truly not profitable, and they even lose quite a bit. Even with the assistance of the China Electronics Technology Alliance, this price is still not profitable.
For every phone sold, Lei Jun loses $54 in cost.
Looking at it this way, everyone might think Lei Jun is crazy, losing money to gain popularity.
Of course, this is impossible because there are contracts involved.
Currently, the ways to purchase Zhong Mi are either through a contract, as a bare machine, or through a 10 billion yuan subsidy.
Among these, the contract phone price is actually $480, and Lei Jun can still earn a gross profit of $180, so there's no loss.
The same applies to bare machines, as they are also sold for $480.
As for the 240 dollar price under the 10 billion yuan subsidy, Mr. Huang did not actually subsidize Lei Jun with the price of $240. Instead, there is another agreement between the two parties: for all Zhong Mi phones sold through the 10 billion yuan subsidy, Lei Jun can take a 30% commission from the collected phone bills until the phone is no longer used.
In this era, a phone can last at least two years without any problem. If a user only spends about $10 per month, the commission obtained would be enough to cover the phone's loss.
Anything beyond that would be Lei Jun's gross profit, so this price is not actually a loss, it just requires time cost to be filled. In the short term, there might be cash flow strain.
However, with Mr. Huang's full support behind it, it is unlikely to be a major issue. Besides, another plan is brewing in the background.
In short, Lei Jun does not lack money, and as long as he doesn't lack money, this strategy can continue.
But vivo is taking a completely different path. vivo's bare machine price is $600. This price is considered cheap for a high-end flagship model, but it's certainly not cheap enough to ignore the brand value.
So, after the 10 billion yuan subsidy, it can be sold for $300. But with Zhong Mi at $240, why would anyone buy a phone for $300 that is inferior to Zhong Mi in every aspect except music?
That's right, in fact, vivo phones are inferior to Zhong Mi in many aspects other than music, such as a smaller screen, a lower-tier processor, and lower camera resolution.
These factors actually reduce vivo phones' cost to around $180, about $100 cheaper than Zhong Mi phones' cost. However, they are sold at a bare machine price of $300. A normal person would definitely not make such a choice.
So, the only way is to create brand value for vivo that Zhong Mi doesn't have, allowing users to recognize vivo's brand premium.
But the problem arises again: vivo, a brand that is only considered second-tier in China, has no reason to become a first-tier brand in America. They are not Apple, where Steve Jobs standing there provides top-tier brand value.
vivo needs something to give it value. This can be its lineage, its history, or even its mythology, but these are things vivo cannot possess. Therefore, a superstar is the best source of brand value.
So Mr. Huang directly suggested vivo bind itself to Michael Jackson. After all, are there any bigger stars in this world?
Not to mention acquiring the endorsement at a bargain price.
"See, after getting Michael Jackson's endorsement, haven't you sold 2 million units in just half a month?" Mr. Huang smiled.
"But these people are probably all his fans. Once his fans finish buying, my phones won't sell anymore. I've bet my entire fortune on this!" Chen Yongming said with a headache.
"Your thinking is too pessimistic. You're making assumptions based on the idea that Michael Jackson cannot clear his name and will always bear that burden of sin!"
"What if, one day, he is cleared of his charges, for example, if the court directly rules him not guilty, and all the accusations against him are proven false, and those children who accused him admit they lied for personal gain?" Mr. Huang asked.
"Is that possible?" Chen Yongming was stunned.
"Never mind whether it's possible or not. If all of this really happens, then as the only brand that stood by a superstar during his time of crisis, once everything is cleared up, the more you are criticized now, the higher you will be praised in the future!" Mr. Huang said happily.