Case Study

‘Hello Kitty’
A Japanese Superbrand

© 2006 The Icfai Center for Management Research (ICMR). All Rights Reserved. For accessing and procuring the
MARKETING MASTERMIND 60 June 2007
case study, log on to www.ecch.cranfield.ac.uk or www.icmrindia.org

Marketing Mastermind_June-2007_Final.pmd 60 6/1/2007, 4:30 PM


Hello Kitty was the name of a
cartoon cat developed in 1974
by Sanrio Co. Ltd. (Sanrio), a
Japanese company that sold
character-branded goods in
Japan and other parts of the
world. Sanrio initially used the
character to adorn petty
merchandise like coin purses
and pencil boxes targeted at
small girls. However, after Hello
Kitty became hugely popular,
Sanrio extended the brand to a
variety of other products.
By the early 2000s, Hello
Kitty featured on products
ranging from vacuum cleaners
to DVD players, toilet paper to
cars, and computers to candy,
and was thought to be one of
the most powerful brands in the
world.
This case discusses the
reasons for the popularity of
Hello Kitty, and tries to analyze
the unique features of the
brand. It also talks about the
various steps Sanrio took over
the years to revive and
reinvent Hello Kitty when sales
showed signs of flagging. The
role of celebrity endorsements
in creating brand value is also
discussed. The case concludes
with a commentary on Sanrio’s
efforts to convert Hello Kitty
into a luxury brand.
Marketing Mastermind_June-2007_Final.pmd
‘Hello Kitty’
She (Hello Kitty) is the original, and it is hard to replace her. She became
the icon of cute for a whole generation. You can’t buy that kind of lucky coinci-
dence.1
– Ken Belson
Co-author, Hello Kitty: The Remarkable Story of Sanrio
and the Billion Dollar Feline Phenomenon, in 2004.
Hello Kitty was propelled from day one by the character’s cute and simple
design. After 30 years, we’re glad to see that people are still buying her prod-
ucts.2
– Bill Hensley
Marketing Director, Sanrio Inc., in 2003.
Hello Kitty Goes Luxe under the label the “Hello Kitty Col-
In early 2005, Sanrio Co Ltd. lection by Little Lilly” at upscale bou-
(Sanrio), the Japanese company tiques in the US. On the technology
which created the popular cartoon front, a Japanese company called
cat Hello Kitty, entered into a licens- Business Design Laboratory created a
ing agreement with jewelry designer 20-inch tall Hello Kitty robot4 that
Kimora Lee Simmons’ (Simmons) could perform the job of front-desk
company, Simmons Jewelry Co., to personnel in the early 2000s.
create a line of diamond jewelry— Apart from luxury products, con-
the “Hello Kitty Collection by Kimora sumers could also buy affordable
Lee Simmons.” products like Hello Kitty pencil
Simmons’ jewelry line, which in- boxes, purses, and apparel from vari-
cluded pendants, rings, and diamond ous stores worldwide. Reportedly, as
watches, was priced in the range of of early 2006, there were thousands
$350 to $3,5003, and was launched of different Hello Kitty products
in March 2005. The diamond available in over 40 countries around
watches, which were reportedly the the world.
best selling items in the line, were Sanrio first introduced Hello Kitty
priced between $1,875 and $3,250 in 1974, as an embellishment on a
and were available in eight different small coin purse sold by the com-
designs. All of Simmons’ jewelry was pany. Children, especially small girls,
available exclusively at Neiman- loved the cartoon and the cat became
Marcus outlets across the US. (Refer very popular. Keeping the character’s
to Exhibit I for pictures of some of popularity in mind, Sanrio produced
Simmons’ jewelry pieces). several Hello Kitty branded products,
Diamond jewelry was only a aimed at small girls and preteens
small part of the Hello Kitty mer- over the late 1970s.
chandising universe. The Hello Kitty However, during the 1980s, the
brand was also used on designer ap- growing popularity of other cartoon
parel, accessories, and perfumes. characters such as Doraemon (an-
High-end pet accessories were sold other cat) resulted in the Hello Kitty
1
Edward Gomez, “Pop: How Hello Kitty came to rule the world,” http://www.sfgate.com,
July 14, 2004.
2
Parija Bhatnagar, “Hello Kitty’s a whisker away from 30,” http://money.cnn.com,
November 14, 2003.
3
Dollars ($) refer to US Dollars in this case study.
4
The robot could recognize as many as 10 faces, ask visitors to speak their names, and tell
them when the person they had come to see was ready.
MARKE
MARKETING MASTERMIND 61 June 2007
61 6/1/2007, 4:30 PM
 Case Study

Exhibit I: Hello Kitty Diamond Jewelry Collection by Kimora Lee Simmons brand once again by associating it
with jewelry and luxury products.

Background
Shintaro Tsuji (Tsuji), the founder of
Sanrio, was born in 1927 in the
Yamanashi region of Japan. Tsuji
was an engineering graduate, and
worked for the Japanese government
before resigning to pursue his entre-
preneurial ambitions. Tsuji set up the
Yamanashi Silk Center (YSC) in
1960, through which he sold silk
goods like purses, slippers, etc.7
However, Tsuji did not find much suc-
cess in this business initially.
In 1962, Tsuji started selling a line
of slippers that had the picture of a
strawberry on them. These slippers
went on to become a huge success and
gave a boost to Tsuji’s struggling busi-
ness. Tsuji realized then that consum-
ers were more attracted to items that
Source: Cheryl Kremkow, “Licensed to sell,” http://www.modernjeweler.com, June 1, 2006.
had been embellished with some de-
sign or character. He was later quoted
brand losing some of its appeal. toon characters like Mickey Mouse, as saying, “If you attach added value
Therefore, in the mid-1990s, Sanrio Snoopy, and Winnie the Pooh. Such or design to the product, they sell in a
repositioned the brand to make it ap- was Hello Kitty’s popularity that she completely different way.”8
pealing to a wider age range of fe- was chosen the UNICEF 5 ambassador After the success of the slippers
male customers. The repositioning for the USA in 1983 and for Japan in Tsuji concentrated on developing de-
was successful, and Hello Kitty re- 1994. signs and pictures that could be used
gained its popularity. By the early 2000s, however, to adorn his merchandise. In the
Over the years, Sanrio launched Hello Kitty began facing brand fa- meantime, he received a license from
the Hello Kitty brand in various coun- tigue6 in its domestic market, Ja- Charles Schulz9 to use the famous
tries in Southeast Asia, Europe, and pan. In 2002, Winnie the Pooh re- Snoopy character on his merchan-
the Americas. In Southeast Asia, ana- placed Hello Kitty as the best-selling dise. Apart from this, Tsuji also be-
lysts noted that girls showed almost a character among female consumers gan selling Hallmark 10 greeting
fanatical devotion to the brand. in Japan. This in turn had an impact cards and Barbie11 dolls in Japan.
Apart from Southeast Asia, Hello on Sanrio as Hello Kitty was the However, these products did not find
Kitty was also hugely popular in the company’s main brand and Japan a good market in the country as
US—so popular that she was consid- its key market. In the early 2000s, Japanese consumers considered them
ered to be in the same league as car- Sanrio was trying to reposition the to be too “western”.
5
Established by the United Nations in 1946, UNICEF is the acronym for United Nation’s Children’s Fund.
6
Brand fatigue occurs when consumers get bored of a particular brand, after purchasing too many products of the same brand.
7
The YSC did not actually manufacture any of these products. The manufacturing was contracted out to smaller companies, and YSC
concerned itself only with the marketing of the products.
8
“Pick of the Litter,” http://metropolis.japantoday.com, Issue 513.
9
Born in November 1922, Charles Schultz was the creator of the famous cartoon strip, Peanuts. Snoopy, a dog, was one of the main
characters in these cartoon strips.
10
A Missouri, US based company, Hallmark is one of the largest manufacturers of greeting cards in the world.
11
Barbie is one of the most well-known and also one of the best-selling dolls in the world. It is manufactured by the US-based toymaker,
Mattel Inc.

MARKETING MASTERMIND 62 June 2007

Marketing Mastermind_June-2007_Final.pmd 62 6/1/2007, 4:30 PM


Over a period of time, Tsuji re-
cruited artists to develop characters
that could be used to decorate items
like key chains, cups, etc. By the end
of the 1960s, he had put together an
in-house creative team that was re-
sponsible for churning out new de-
signs and characters. Tsuji’s intention
was to take advantage of the Japa-
nese custom of giving gifts. In Japan,
people often exchange small and in-
expensive gifts like key chains and
other tokens. Even children like to ex-
change small gifts and small statio-
nery items. Tsuji noted that there was
a huge market for merchandise such
as pencil boxes, small purses, etc.,
that young people could afford to
buy.
In 1973, Tsuji incorporated YSC as
Sanrio Co. Ltd. The company adopted
the motto “Small Gift, Big Smile, ” im-
plying that a small gift could bring
great joy to both the giver as well as
the receiver, and that gifts were a form
of expressing one’s feelings to another
person. Sanrio focused on selling
character-branded goods to young
people. The company defined its main
business as “social communication
gift products” or small gifts that were
exchanged socially.
During the early 1970s, Tsuji and
his creative team introduced various
characters and designs for use on
merchandise. Prominent among
these were Patty and Jimmy (cartoon
characters of a girl and a boy) and
Hello Kitty, in 1974. Hello Kitty be-
came an instant hit with children,
who took a liking to the cute cat
with the oversized head. Hello Kitty’s
sales grew quickly, and this contrib-
uted to Sanrio’s success in the 1970s.
Soon, Hello Kitty had become so
popular that many companies started
approaching Sanrio for permission
to use the image. In 1976, Sanrio
started licensing the Hello Kitty im-
age to various companies for use on
MARKETING MASTERMIND
Marketing Mastermind_June-2007_Final.pmd 63
Exhibit II: Sanrio’s Main Businesses as of Early 2006
Segment Subsegment
Social communication gift Social communication
business gift products
Greeting cards
Publications
Movies, videos
Theme park business Theme park service
Tie-up commissions
Plays
Other businesses Restaurants
Theatre
Real estate
Adapted from www.sanrio.co.jp.
their merchandise. Over the years,
Sanrio introdu ced several other
popular characters like Chococat,
Keroppi, Cinnamoroll, etc., but
Hello Kitty remained its most suc-
cessful character. The brand’s suc-
cess made Sanrio one of the leading
companies in the lucrative character
branded goods market in Japan.
Sanrio also made money by licens-
ing its other cartoon characters to
other companies in Japan and
worldwide.
Apart from marketing character-
branded goods, Sanrio also produced
movies. In 1978, Tsuji received an
Academy Award in the “best docu-
mentary film” category for the movie
Who are the Debolts and Where Did
They Get 19 Kids? However, most of
the company’s revenues still came
from its “social communication busi-
nesses” or the sale of character-
branded merchandise.
Over the years, Sanrio continued
to introduce new cartoon characters
at regular intervals while retiring
63 June 2007
6/1/2007, 4:30 PM
‘Hello Kitty’
Major Businesses
Stationery, kitchen and tableware, interior
decorative goods, portable goods,
apparel, etc.
Birthday cards, Christmas cards
Gift books, general publications and
magazines
Film distribution, video software sales
Amusement park, sales of merchandise,
restaurants.
Commissions from collaborating
companies
Revenues from musicals and other plays
Restaurants, Kentucky Fried Chicken
(franchise)
Revenues from performances at Sanrio-
owned theaters
Real estate rental
some of the older characters. How-
ever, Hello Kitty remained the
company’s main brand. (Reportedly,
the Hello Kitty brand was providing
almost half of Sanrio’s revenues by
the early 2000s.)
Sanrio opened an amusement
park called Puroland in Tokyo, Ja-
pan, in 1990. In 1991, the company
opened another amusement park
called Harmonyland in Oita, Japan.
Sanrio’s product range, which com-
prised mainly stationery items in the
1970s, was extended to a wide array
of products including apparel and
accessories by the early 2000s (Refer
to Exhibit II for Sanrio’s major busi-
nesses in early 2006).
Over the years, Sanrio launched
its characters in various countries
mainly through licensing. In 2006,
the International Licensing Industry
Merchandisers’ Association (LIMA)
inducted Tsuji into the Murray
Altchuler Licensing Industry Hall of
Fame. According to LIMA, Tsuji
was recognized for his 30-year ca-
 Case Study

reer in the licensing industry, dur-
ing which time he had built up
Hello Kitty into a “global licensing
phenomenon”. 12
Although Sanrio expanded its
overseas market over the years, Ja-
pan remained its key market throu-
ghout. Tsuji was considered to be the
equivalent of Walt Disney in Japan
because of the success achieved by
Sanrio’s characters in the country
and around the world.
As of early 2006, Sanrio sold its
products in more than 40 countries in
Asia, Europe, and the Americas (Refer
to Exhibit III for the various subsidiar-
ies of Sanrio as of early 2006).
Hello Kitty Through the
Years
During the early 1970s, Sanrio car-
ried out a consumer survey which re-
vealed that the most popular cartoon
characters in Japan were those of
dogs, bears, and cats. Accordingly,
the company asked its creative team
to develop new characters based on
these animals. In 1974, Shimizu
Yuko (Shimizu), one of the designers
who mainly designed wallets for the
company, created several characters
including designs for a cat, a dog,
and a bear.
The design of the cat character
was interesting in that it had an
oversized round face with two dots
as eyes, a button nose, and no
mouth. It also had six whiskers and
a red bow on its left ear. The cat,
like most other cartoon characters,
sat in a human-like posture. One of
the most striking features of this cat,
however, was that its face was com-
pletely expressionless (Refer to Ex-
hibit IV for a picture of the first
Hello Kitty design).
Sanrio first used the cat (which
had no name at the time) to deco-
rate a coin purse, which it sold
along with other wallets in 1974
(Refer to Exhibit V for a picture of
the Hello Kitty coin purse). Over
time, Sanrio observed that the
purses featuring the cat were selling
better than the others. To make the
most of the cat’s popularity, the com-
pany decided to give it a solo launch
in 1975. Sanrio named the charac-
ter “Hello Kitty”, and began selling
toys, stationery items, and other
small gift articles with pictures of
Hello Kitty. Explaining the rationale
behind the name, Bill Hensley
(Hensley), marketing director,
Sanrio’s US business, Sanrio Inc.13
said, “Gift-giving is an important
part of the Japanese culture. In Ja-
pan, ‘Hello’ communicates the idea
of open communication. That’s why
she was named Hello Kitty.”14
Tsuji initially targeted the Hello
Kitty merchandise at girls aged be-
tween 4 and 6. The goods were
priced low so that they could be
bought by the target consumers.

Exhibit III: Various Subsidiaries of Sanrio as of Early 2006

Name Location Major Businesses Business Relationship
Sanrio Inc. San Francisco, USA Social communication gifts Imports and sales of Sanrio products, loyalty trading
Sanrio Do BrasilComercio e Tamboré, Brazil Social communication gifts Import and sales of Sanrio products
Representacoes Ltda.
Sanrio (HongKong) Co.,Ltd. Hong Kong Social communication gifts Manufacturing of Sanrio products, loyalty trading
Sanrio Korea Co. Ltd. Seoul, Korea Social communication gifts Manufacturing of Sanrio products, loyalty trading
Sanrio Taiwan Co.,Ltd. Taipei, Taiwan Social communication gifts Manufacturing of Sanrio products, loyalty trading
Sanrio GmbH Schleswig-Holstein,Germany Social communication gifts Imports and sales of Sanrio products, loyalty trading
Sanrio (Shanghai) Shanghai, China Social communication gifts Manufacturing ofSanrio products,loyalty trading
International TradingCo., Ltd.
Sanrio AsiaMerchandise Co.,Ltd. Hong Kong Social communication gifts Manufacturing ofSanrio products,loyalty trading
Sanrio Puroland Co.,Ltd. Tama-Shi,Tokyo Theme parks Purchase & sales of Sanrio products, loyalty trading
Harmony Land Co., Ltd. Hinode-cho, Hayami-gun, Oita Theme parks Purchase & sales of Sanrio products, loyalty trading
Sanrio Far East Co.,Ltd. Shinagawa-ku, Tokyo Social communication gifts Manufacturing of Sanrio products, loyalty trading
Note: This is the not the complete list of Sanrio’s subsidiaries.
Source: www.sanrio.co.jp
12
http://www.licensing.org/news.
13
Sanrio opened its first shop called “The Strawberry Shop” that sold Sanrio merchandise in the US in 1969. Later in 1976, the company
set up its American subsidiary, Sanrio Inc., in California.
14
Parija Bhatnagar, “Hello Kitty’s a Whisker Away from 30,” http://money.cnn.com, November 14, 2003.

MARKETING MASTERMIND 64 June 2007

Marketing Mastermind_June-2007_Final.pmd 64 6/1/2007, 4:30 PM


Exhibit IV: The First Design in popularity throughout the 1980s
of Hello Kitty and the early 1990s, not only in Ja-
pan, but also in other countries
(Mainly in Southeast Asia and North
America).
In the mid-1980s, Sanrio re-
cruited a new designer, Yamaguchi
Yuko (Yamaguchi). Yamaguchi was
believed to be responsible for ex-
tending the Hello Kitty brand to a
Source: www.sanrio.co.jp wide array of items including candy,
accessories, clothes, and electronic
Exhibit V: The Hello Kitty Coin Purse
goods. By this time, Sanrio had be-
gun efforts to make the Hello Kitty
brand more attractive to teenaged
girls (going beyond its traditional
market of small girls) in a bid to re-
vive the fading brand. Reportedly,
Sanrio got the idea after a high-school
girl wrote a letter to the company in
1986 complaining that it did not pro-
duce products for girls of her age.
After this, Yamaguchi visited vari-
Source: “Hello Kitty Celebrates Thirtieth
Anniversary,” http://web-japan.org, March 2004. ous shops in Japan to find out what
customers expected from Hello Kitty.
Hello Kitty became an instant hit She realized that although the com-
with small girls because of her “cute- pany had positioned Hello Kitty as a
ness”. As a result, Hello Kitty mer- character for small girls, the brand’s
chandise began selling well in the appeal went far beyond the original
market. The fact that the merchan- target market. Consequently, she con-
dise was priced affordably added to vinced the company to take steps to
its success. Hello Kitty’s popularity make Hello Kitty acceptable to di-
continued to increase throughout the verse age groups. She even intro-
1970s. Meanwhile, Sanrio launched duced a sober black and white Hello
Hello Kitty and other characters in the Kitty design in order to attract older
US. Here too, the company noticed consumers. However, in spite of these
that Hello Kitty was more popular efforts, Sanrio was not very success-
than its other Sanrio counterparts. ful in reviving the brand.
However, in the 1980s, Hello Hello Kitty got a fresh lease of life
Kitty began losing its cachet in Ja- in the mid-1990s, after Sanrio man-
pan, due to the growing popularity of aged to successfully change the posi-
new anime15 characters such as tioning of the brand. This period was
Doraemon. Anime continued to grow called the “Kitty boom” by some in-
15
Animation is referred to as anime by the Japanese. Anime is also the term popularly used the world over for Japanese animation work.
16
Hello Kitty was popularly called “Kitty-chan” by her Japanese fans.
17
Alex Jordan, “Big in Japan—Hello Kitty!” http://metropolis.japantoday.com.
18
Photo booths, popular in Japan. A typical booth is large enough to hold up to eight people, and some are even larger. They typically cost
between 300 and 600 yen per session. Once the money is inserted, between two to ten different pictures can be taken. Once the pictures
have been taken, the occupants select those that they wish to keep and print using a touch sensitive screen or pen-sensitive screen. The
pictures can then be decorated on the screen with a vast array of virtual stamps, borders, and text. (Source: http://en.wikipedia.org/
wiki/Print_Club)
MARKETING MASTERMIND 65 June 2007
Marketing Mastermind_June-2007_Final.pmd 65
‘Hello Kitty’
dustry observers. In 1996, Yamaguchi
designed “hip” products like Hello
Kitty mobile phone cases, etc., tar-
geted at high-school girls. These prod-
ucts were popular, and sold well.
Some analysts, however, believed
that Hello Kitty’s revival during this
time was the result of several factors,
and could not be completely credited
to Sanrio. They believed that Hello
Kitty experienced a sudden rise in
popularity due to the voluntary en-
dorsement of the brand by Tomomi
Kahara (Kahara), a young Japanese
singer, in the mid-1990s.
Kahara, who was very popular
with high school girls, proclaimed
herself to be a big fan of Hello Kitty,
and sported a variety of Hello Kitty
products during her public appear-
ances. Said Takahashi Ko (Ko), mar-
keting executive at Sanrio, “Kitty ex-
perienced the greatest rise in popu-
larity since her creation thanks to
pop singer Kahara Tomomi. She
went on the highly rated TV program
—Utaban and told the hosts that she
loved Kitty-chan16 more than any-
thing. Within days sales in our outlets
had nearly doubled.”17
Analysts also attributed the popu-
larity of Hello Kitty among teenaged
girls in Japan to another fad preva-
lent in Japan during the mid-1990s
— Print Club kiosks18. These kiosks
were mainly used by female consum-
ers aged between 13 and 28. Sanrio,
spotting a business opportunity, set
up Print Club kiosks in its shops. Ac-
cording to the company, young girls
who were waiting to use a kiosk
browsed around the shop and bought
Hello Kitty merchandise.
6/1/2007, 4:30 PM
 Case Study
Another reason for Hello Kitty’s
revival, according to industry observ-
ers, was that young women who had
been fans of Hello Kitty in their child-
hood continued to buy the brand even
after they grew up. It was noted that
women liked to decorate their office
desks with Hello Kitty merchandise.
Further, young mothers were buying
merchandise for themselves (like
toasters, hair curlers, etc.) as well as
their children, and Hello Kitty had,
by the early 2000s, become a brand
that attracted female consumers in
the age group of 4 to 30.
Interestingly, a “Kitty boom” oc-
curred outside Japan too at this time.
During the 1990s, Hello Kitty had
become hugely popular in the US and
some Southeast Asian countries. Ap-
parently, Hello Kitty’s popularity
among celebrities was not restricted
to Japan. The brand became a favor-
ite with many celebrities in other
Asian and western countries, espe-
cially in the US, during the late
1990s. Reportedly, celebrities in the
US like singer Christina Aguilera,
musician and TV personality Lisa
Loeb (Loeb), supermodel Tyra
Banks, and singer Mariah Carey
(Carey) were big fans of Hello Kitty.
Carey made headlines when she
showed off her Hello Kitty hair dryer
and boom box19 while appearing in
an episode of a popular television
show, MTV Cribs, in the early 2000s.
Loeb, a popular singer in the US,
even dedicated an album to Hello
Kitty. The album was aptly titled
Hello Lisa.20 Many celebrities such as
Cameron Diaz, Mandy Moore, Heidi
Klum, Carmen Elektra, Nicky Hilton,
Ashley Judd, Madonna, and others
posed for fashion magazines dressed
19
Boom box refers to a portable stereo system.
20
Kelly Carter, “Hello Kitty is the Cat’s Meow,” http://www.usatoday.com, April 21, 2002.
21
Founded in 1895, Swarovski AG is a Switzerland-based company that is popular for its crystal glass products sold under the name
Swarovski. As of early 2006, the company sold jewelry, fashion accessories, home accessories, and eyewear under the brands Daniel
Swarovski and Swarovski.
MARKETING MASTERMIND
Marketing Mastermind_June-2007_Final.pmd 66
Exhibit VI: Celebrities Endorsing the Hello Kitty Brand
Cameron Diaz wearing a Mandy Moore with a Hello Nicky Hilton wearing a Hello
Tarantino necklace Kitty beaded purse Kitty Heatherette dress
Source: www.sanrio.com.jp
in outfits with pictures of Hello Kitty high-end luxury items. The fact that
and accessories (Refer to Exhibit VI it was voluntarily endorsed by celeb-
for pictures of celebrities with the rities helped Hello Kitty’s new posi-
Hello Kitty brand). tioning as a luxury brand. In April
Becoming a “Hollywood favorite” 2003, the Hello Kitty brand was used
helped Hello Kitty gain visibility by Heatherette, a fashion label in the
worldwide. Sanrio also acted quickly US, for its Spring/Summer 2003 col-
to make the most of this popularity. lection. Designers Richie Rich and
During the “Kitty boom” the company Traver Rains launched a new line of
entered into several licensing agree- clothing featuring exclusive Hello
ments and brought out a host of Kitty designs. Swarovski21 offered a
Hello Kitty products. It licensed Hello range of Hello Kitty merchandise like
Kitty for varied products targeted at watches, jewelry, charms for mobile
different consumer groups. While on phones, etc. By this time, there were
the one hand, Hello Kitty was featured collectors of unique Hello Kitty mer-
on small items like pencil boxes for chandise. The items ranged from
small girls and accessories for high- high-end products like a Hello Kitty
school girls, there was also a Hello watch by Swarovski to limited edi-
Kitty car targeted at young women. tion dolls like the Hello Kitty wed-
Thanks to voluntary endorsements ding collection by Sanrio.
by celebrities, Hello Kitty had become In November 2004, Hello Kitty
a fashion symbol by the early 2000s. completed 30 years. It was interest-
This allowed Hello Kitty to gain ac- ing to note that organizations other
ceptance as a “premium brand” even than Sanrio were also keen to cel-
though the brand was still used by ebrate Hello Kitty’s 30th “birthday”.
Sanrio and other companies (under li- For example, the Japan Mint pro-
cense) for small stationery items like duced 200,000 commemorative coin
pencils and sharpeners. sets to commemorate the anniver-
In the early 2000s, the Hello Kitty sary. Another Japanese company,
brand had reached near saturation Tanaka Kikinzoku Kogyo KK, made
point in traditional products. There- 12 solid platinum statues worth
fore, Sanrio looked for tie-ups with $30,000 each, and sold all 12 (Refer
66 June 2007
6/1/2007, 4:30 PM
 ‘Hello Kitty’

to Exhibit VII for a picture of the Exhibit VII: The Hello Kitty items of its own every year. (Report-
Hello Kitty platinum statue). Platinum Statue edly, 90% of the creative design team
at Sanrio’s headquarters were
Sanrio’s Licensing of women. According to some analysts,
Hello Kitty this went in favor of the company as
According to analysts, Sanrio’s deci- the designers understood the needs
sion to put Hello Kitty on a wide vari- and preferences of the target market
ety of products was largely respon- well.)
sible for keeping the brand in the Sanrio replaced old Hello Kitty
public eye for more than three de- branded merchandise in shops with
cades. After featuring the cat on a new items every six months. This kept
coin purse in 1975, Sanrio had, over the merchandise trendy and relevant.
the years, branched out to include Sanrio’s amusement parks Puroland
several other items under the Hello and Harmonyland were “Kitty-
Kitty brand. Analysts commented themed”, and they even offered Hello
that Sanrio had put Hello Kitty on Kitty-theme weddings. By the early
practically everything. Only Hello 2000s, Sanrio was introducing close
Kitty featured on items ranging from Source: “Platinum Hello Kitty on sale in Japan,” to 100 new designs of Hello Kitty
vacuum cleaners to DVD players, toi- http://www.platinum.matthey.com, products per month, worldwide. 27
let paper to cars and computers to February 4, 2004. Even though the Hello Kitty brand
candy. Said Bruce Guiliano tion with gaming companies. For in- was used on a range of items, Sanrio
(Guiliano), senior vice president of stance, in 2006, Sanrio and MOffy, a took measures to protect the brand’s
licensing, Sanrio Inc., “In Japan, it’s Hong-Kong based mobile games de- image from being sullied. For ex-
possible to have your entire house veloper, launched a series of mobile ample, Sanrio did not permit compa-
decorated and fixturized in Hello games called Hello Kitty Saves the nies to use the Hello Kitty brand for
Kitty…. There’s even a Hello Kitty Beach, Hello Kitty Magic Block, Hello three categories of products—alco-
dishwasher.”22 Kitty Amazing Circus, and Hello Kitty hol, firearms, and tobacco. Report-
Sanrio was able to feature Hello Joyful Balloon. edly, Sanrio spent ¥1.5 bn28 every
Kitty on a variety of products through It was also through licensing that year on measures against unautho-
its licensing agreements with compa- Sanrio was able to extend the Hello rized copying to control its character-
nies. For instance, in Japan, Kitty brand to luxury products. For goods business.
toymakers like Takara Co. Ltd. 23 and instance, Daiwa Resort Co. Ltd., a It was also worth noting that
Bandai Co. Ltd. (Bandai)24 produced popular hotel chain in Japan, offered Sanrio used minimal advertising to
Hello Kitty toys under license from Hello Kitty-themed suites to its cus- promote Hello Kitty. The advertising
Sanrio. Matsushita Electrical Indus- tomers under license from Sanrio. mostly consisted of print and online
trial Co. Ltd. (Matsushita)25 had the Tarina Tarantino (Tarantino), a fa- advertising, which was primarily cre-
license to make Hello Kitty toasters. mous designer in the US, launched a ated in-house. The company believed
Mitsubishi Motor Corp. (Mitsubishi)26 new line of jewelry called the “Hello that word-of-mouth was more pow-
created a prototype “champagne Kitty Pink Head Collection” under li- erful than promoting the product in
pink” Hello Kitty minicar in 2006. cense from Sanrio. the media through TV advertise-
Sanrio also offered Hello Kitty video In addition to licensing out the ments, movie tie-ins, etc. Said
games and mobile games in associa- brand, Sanrio also introduced new Hensley, “The publicity feeds word-
22
Sandy Cohen, “Hello Kitty’s Sweet Puss on Everything from Toys to Toasters,” www.dailybreeze.com, November 4, 2004.
23
Founded in 1955, Takara Co. Ltd., is a well-known toy company in Japan.
24
Bandai is a major toy manufacturing company in Japan and belongs to Namco Bandai Holdings Ltd. As of early 2006, Bandai was the
third largest manufacturer of toys in the world.
25
Founded in 1918, Matsushita is an electronics goods company based in Kadoma, Japan. It produces several electronic goods like home
appliances, automotive components, microchips, etc., under the brand names Panasonic, Quasar, Ramsa, Nais, Technics, and National.
26
Mitsubishi is one of the largest auto manufacturing companies in Japan.
27
http://www.toydirectory.com
28
As of July 17, 2006, 1 Japanese yen was equivalent to 0.00862738 US$.

MARKETING MASTERMIND 67 June 2007

Marketing Mastermind_June-2007_Final.pmd 67 6/1/2007, 4:30 PM

 Case Study
of-mouth better than advertising
does, and that word-of-mouth is re-
ally what drives the Sanrio experi-
ence.”29 Sanrio, unlike other cartoon
companies, did not produce Hello
Kitty based comic strips, movies, or
TV shows on a regular basis.
However, Sanrio actively partici-
pated in co-branding and other pro-
motional programs. For instance, in
1999, Sanrio entered into a market-
ing tie-up with McDonald’s30 in Tai-
wan. As a part of the promotional
program, McDonald’s gave away a
limited edition of Hello Kitty wed-
ding collection dolls with every
“Happy Meal”. The campaign was so
successful that it led to stampedes and
fights among consumers. Reportedly,
many fans purchased Happy Meals
only to throw them away while keep-
ing the dolls. The limited edition dolls
were later sold for thousands of dol-
lars as collectors’ items.
In 2005, Sanrio permitted Eva
Air, a Taiwanese airline, to decorate
some of its aircraft in the Hello Kitty
theme. It was said that these flights
were booked more than 90% on an
average. The carrier also did brisk
business in Hello Kitty branded duty-
free goods. In the US, Sanrio worked
with some retailers to develop prod-
ucts that met their specific require-
ments. For instance, Target, a US-
based retailer, carried an exclusive
line of Hello Kitty merchandise such
as party invitations, small inflatable
chairs, etc. Target even had a special
Hello Kitty princess costume consist-
ing of a Kitty-themed dress, wand,
footwear, etc.
By the early 2000s, the Hello Kitty
was recognized in more than 40
countries in Asia, Europe, and the
Americas. Hello Kitty was believed to
29
James Betzold, “Bill Hensley,” Advertising Age, October 8, 2001, Issue 41.
30
McDonald’s Corporation is a US-based fast food restaurant chain company with operations spread in over 119 countries. The company
operated close to 30,000 local restaurants all over the world.
31
Kawaii means cute in Japanese.
MARKETING MASTERMIND
Marketing Mastermind_June-2007_Final.pmd 68
be one of the most successful com-
mercial images in the world.
What Made Hello Kitty
Click?
Over the years, experts have tried to
analyze the reasons for Hello Kitty’s
extraordinary popularity worldwide.
They were puzzled as to why only
Hello Kitty, from among the many
other characters created by Sanrio,
clicked in the market. They have tried
to discover the reasons that made
Hello Kitty the “Queen of cute” for
many female consumers worldwide.
Many analysts attributed Hello
Kitty’s success in Japan to the preva-
lence of the Kawaii31 culture in the
country. The Japanese, regardless of
their age, were known to have a pas-
sion for “cute” objects. For instance, it
was considered normal for grown
women in Japan to be seen with mo-
bile phone cases that were adorned
with cartoon characters, or for banks
to print check books with pictures of
cartoons. The postal department is-
sued stamps featuring popular car-
toon characters, and it was said that
even the local police departments in
Japan had cute-looking mascots.
The Kawaii culture began to gain
prominence in Japan during the 1970s,
and persisted through the 1980s and
1990s. It helped that Hello Kitty came
into existence at a time when the
Kawaii culture was at a high in the
country. Because of this, it was widely
believed that Hello Kitty had become
an icon of “cute” for the Japanese.
Another reason for Hello Kitty’s
success was considered to be its de-
sign. It was generally believed that
the simplicity of the character’s de-
sign appealed to consumers. The
Hello Kitty design consisted of simple
68 June 2007
6/1/2007, 4:30 PM
lines and very little detail. Besides,
the design was kept unchanged over
the thirty years of its existence. While
other cartoon characters had evolved
over time, Hello Kitty remained al-
most the same. For instance, when
Mickey Mouse was first introduced,
he looked like a rat. However, over
time, Disney “toned down” the look
to make him more likeable to chil-
dren. The only major change in the
design of Hello Kitty was made in
1993 when Sanrio replaced the cat’s
bow with a flower. Later on, the com-
pany began selling Hello Kitty designs
that had either a flower or a bow. (The
bow, however, remained the favorite.)
It was interesting to note that Hello
Kitty’s “look”, however, changed with
the times although the basic design re-
mained the same. The change in looks
was initiated by Yamaguchi in the mid-
1980s after she had spent time with
customers at various Sanrio shops to
find out what they expected from Hello
Kitty. Yamaguchi found out that con-
sumers wanted to see Hello Kitty in a
variety of costumes.
Based on this feedback, over the
years Yamaguchi dressed Hello Kitty
up as a bride, a nurse, a teacher, and
a rock star, among others. She also
introduced the character in various
postures — standing, playing the pi-
ano, etc. According to many analysts,
children and adults alike were fasci-
nated with the different looks sported
by Hello Kitty. In Japan, Sanrio intro-
duced close to 200 “localized” Hello
Kitty dolls by 2003. The company in-
troduced localized Hello Kitty for ev-
ery region and major city in Japan,
and this represented the region’s spe-
cialty. Some examples were those of
Hello Kitty peeking out of a cabbage
in Gunma and one dressed like
 ‘Hello Kitty’

Momotaro, a legendary character be- Exhibit VIII: A Brief Biography of Hello Kitty
longing to the region, for the
Hello Kitty was born in suburban London on November 1.
Okayama region.
Unlike other cartoon characters Her real name is Kitty White.
that were originally developed for Hello Kitty’s family consisted of her father, George White, mother Mary White and a twin sister,
cartoon strips, TV shows, etc., and Mimmy. Other family members included Anthony and Mary White, Hello Kitty’s grandfather and
later used on merchandise, Sanrio de- grandmother respectively. Sanrio also created several friends for Hello Kitty.
veloped Hello Kitty purely for its mer- Source: www.sanrio.co.jp
chandise. Although Sanrio did release dlers, a cuddly playmate for young little face.”36 She, along with a host
some Hello Kitty movies, comic strips, girls, and a walk down memory lane of other celebrities, created unique
and video games, it was done only af- for adults yearning for another taste Hello Kitty items while celebrating
ter the character had already been es- of childhood,” said Ken Belson and the 30th ‘birthday’ of Hello Kitty in
tablished in the public eye. Brian Bremner, authors of Hello November 2004.
Many also noted that Sanrio, un- Kitty: The Remarkable Story of On the Hello Kitty craze among
like other companies, did not de- Sanrio and the Billion Dollar Feline celebrities, one executive at Sanrio
velop Hello Kitty’s character traits. Phenomenon. 34 Further, the lack of a commented, “Our characters are all
For instance, children could easily mouth also gave Hello Kitty an emo- intended to look cute. But these
distinguish between the nature and tionless face, in stark contrast to the people seem to think of Hello Kitty as
personality traits of Mickey Mouse faces of other cartoon characters, something ‘cool’ and we haven’t ex-
and Donald Duck or Winnie the which were very expressive. actly figured out why. Kitty wouldn’t
Pooh. The characters were generally Some people believed that the emo- be cool if we meant her that way.”37
developed with the help of TV shows tionless face allowed consumers to However, according to Hensley,
and movies. Hello Kitty, in contrast, project their own emotions onto Hello “Kitty appeals because she’s really
was a “mysterious” cat. Although Kitty. Said Nakajima Seiji, a Sanrio cute and we create functional stuff
Sanrio’s website did give a brief biog- employee, “Without the mouth it is with a fun design. We listen to what’s
raphy of Hello Kitty, her family, and easier to imagine (that) Kitty-chan going on in the customer’s lifestyle
friends, it did not make an attempt to shares whatever feeling you have at and make things with Hello Kitty. So
communicate it aggressively to the that moment. If Kitty-chan was smiling whether it’s a teenage girl going to
consumers (Refer to Exhibit VIII for all the time, and you’d just broken up the prom or Tyra Banks going to the
the biography of Hello Kitty). Accord- with your boyfriend or something and MTV Awards, she can carry that fun
ing to the company this was done de- were very sad, the last thing you’d want Hello Kitty sequin purse.”38
liberately. “We work very hard to to look at was a grinning Hello Kitty.
avoid things that would define the Without a mouth you can imagine she Is Hello Kitty Losing Her
character. All of Sanrio’s characters is sad with you.”35 Charm?
are very minimalist,” said Giuliano. 32 Some analysts, however, attrib- Even though Hello Kitty was still
Much was also made of Hello uted Hello Kitty’s rise to popularity to among the top-selling brands in Ja-
Kitty’s lack of a mouth. Some people just plain luck. According to them, pan as of early 2006, the avenues for
opined that Hello Kitty’s lack of a Hello Kitty had gathered a huge fan future growth seemed limited. The
mouth (which implied that she could following thanks largely to the proc- increasing popularity of Winnie the
not speak) appeared to be more lamations of certain celebrities that Pooh among female consumers
‘Zen33-like’ to the consumers. “This they were Kitty’s fans. For instance, prompted analysts to say that Hello
Zen-like technique, intentionally or Tarantino, a famous designer in the Kitty’s cachet was at risk in Japan.
not, has allowed Kitty to become at US, was quoted as saying, “She’s so Analysts noted that Sanrio had
once the princess of purity to tod- sweet, it just radiates from her cute succeeded in reviving the brand in
32
“Pick of the Litter,” http://metropolis.japantoday.com, Issue 513.
33
A Japanese Sect of Mahayana Buddhism that aims at attaining enlightenment through meditation.
34
Yuki Allyson Honjo, “Kitty power,” http://www.japanreview.net.
35
Charles Spreckley, “What’s up Pussy Cat?” http://metropolis.japantoday.com.
36
Sandy Cohen, “Hello Kitty’s Sweet Puss on Everything from Toys to Toasters,” www.dailybreeze.com, November 4, 2004.
37
Tomoko Otake, “Hello Kitty, Pokemon, Doraemon Battle for Global Supremacy,” http://www.japantimes.co.jp, September 9, 2003.
38
Kelly Carter, “Hello Kitty is the Cat’s Meow,” http://www.usatoday.com, April 21, 2002.

MARKETING MASTERMIND 69 June 2007

Marketing Mastermind_June-2007_Final.pmd 69 6/1/2007, 4:30 PM

 Case Study
the 1990s by repositioning Hello Kitty
to make her appealing to a larger
number of people. However, they
were doubtful if the company could
pull off the same trick a second time.
There were several reasons for this.
Hello Kitty had already been placed
on a wide range of items and there
were few new items left. Further, a
demographic shift was taking place in
Japan, with the number of young
people decreasing over the years ow-
ing to low birth rates. This in turn lim-
ited sales as Sanrio’s target consumers
were young people. Also, as the char-
acter-goods business in Japan had its
roots in the Kawaii culture, brands
like Hello Kitty and others were ex-
pected to lose their appeal once the
culture died out in the country.
Apart from these problems, ana-
lysts also opined that Sanrio could
soon face succession problems. Tsuji,
who was largely acknowledged to be
the driving force behind the
company’s growth, had turned 78 in
2005, and it was thought that his
eventual exit would create a leader-
ship vacuum in Sanrio.
According to analysts, Sanrio’s fi-
nancial performance was also likely to
suffer as a result of Hello Kitty’s de-
creasing popularity. This was because
the brand contributed almost half of
the company’s revenues. “It’s needless
to say that Kitty is Sanrio’s most power-
ful product, their fortune,” said Kazuo
Rikukawa, president, Character
Databank 39. Adding to Sanrio’s woes
was the fact that it had been making
losses in the amusement park business
and was relying heavily on its social
communication business (Refer to Ex-
hibit IX for Sanrio’s operating profit
from various business segments).
39
It is a consulting firm in Japan that tracks the country’s character-goods market.
40
Parija Bhatnagar, “Hello Kitty’s a whisker away from 30,” http://money.cnn.com, November 14, 2003.
41
Ibid.
42
Fender, a US-based company, is one of the leading manufacturers of guitars, amplifiers, basses, and related equipment in the world.
43
Brian Bremner, “Kitty glitter: Saving Hello Kitty,” www.businessweek.com, June 23, 2006.
MARKETING MASTERMIND
Marketing Mastermind_June-2007_Final.pmd 70
Exhibit IX: Operating Profit/(Loss) of Sanrio by Business Segment
from 2004 to 06
Segment For the year ended
March 31, 2004
Social communication 70.37
gifts business
Theme parks business (20.86)
Other businesses 0.41
Source: www.sanrio.co.jp
Sanrio had been increasingly fo-
cusing on the overseas market to im-
prove the revenues from the Hello
Kitty brand. “In Japan, Hello Kitty is
a mature brand, even though it has
seen substantial growth over the
years,”40 said Hensley. He also said,
“Our biggest market for her is still
Japan and Southeast Asia, but our
big push going forward is the West-
ern hemisphere, primarily the US
market.”41 Sanrio also appointed
Mas Imai, a former Disney executive,
as president and chief operating of-
ficer of Sanrio Inc. in 2005 in order
to lead Sanrio’s US operations.
Sanrio continued with its licensing
strategy, bringing out a variety of
Hello Kitty products like a guitar, a
credit card, etc., in the US. In October
2004, the company started offering
co-branded debit cards in association
with MasterCard Inc. targeted at girls
aged between 10 and 14. In the same
month, it entered into an agreement
with Nokia, a major mobile phone
manufacturer, and Cingular Wireless,
a service provider to offer Hello Kitty
mobile phones. In 2006, Sanrio and
Fender Musical Instruments Corp. 42
launched a guitar called “Hello Kitty
Stratocaster”. The guitar was priced
at $229 and was sold on the
company’s website and at participat-
ing Sanrio boutiques in the US.
70 June 2007
6/1/2007, 4:30 PM
(In ¥100 mn )
For the year ended For the year ended
March 31, 2005 March 31, 2006
82 83
(11) (2)
(1) (0)
By 2005-06, Hello Kitty was un-
dergoing another image overhaul in
a bid to attract older consumers. As
of early 2006, the Hello Kitty brand
was used on a variety of luxury goods
that were available at high-end re-
tailers like Neiman-Marcus, Saks
Fifth Avenue, etc., in the US.
Sanrio’s target customers for
Hello Kitty in the US mainly con-
sisted of Asian and Hispanic consum-
ers. But in 2005-06 Sanrio was trying
to target female consumers belong-
ing to all age groups, and all ethnic
and cultural groups. Said Giuliano,
“Hello Kitty is finding increasing ac-
ceptance as (a) symbolic icon of
feminine style and taste.”43 However,
it remained to be seen whether
Sanrio’s extensive licensing of the
Hello Kitty brand would add to the
brand’s value or dilute it. r
SS George
Director,
The Icfai Center for Management Research (ICMR),
Hyderabad.
The author can be reached at ssgeorge@icfai.org
Shirisha Regani
Faculty Associate,
The Icfai Center for Management Research (ICMR),
Hyderabad.
The author can be reached at
shirisharegani@icmr.icfai.com
Smitha Moganty
Former Research Associate,
The Icfai Center for Management Research (ICMR),
Hyderabad.
Reference # 10M-2007-06-12-02