Crouching Tiger, leaping brand: The Tiger Balm story

Doing a roaring tradeWith its famous leaping tiger logo, Tiger Balm in its various forms has been a household icon in millions of Asian homes for more than a century. Be it the traditional balm in its hexagonal jars, medicated plasters or sports rubs, the potent aromatic formula has become the go-to remedy for people in many walks of life seeking relief from aches and pains.

But despite its enduring popularity, few people are aware of the story behind Tiger Balm – especially how the company emerged triumphant from a debilitating experience of management neglect.

In fact, its transformation from a small home-based business to an international name holds several interesting and useful lessons for business, particularly with regard to the creation of durable assets such as brand reputation and distribution.

The roots of Tiger Balm can be traced to its founding in modern day Myanmar, then known as Burma, by the Aw brothers – the sons of Chinese immigrants.

Booming business

ThinkAloud4Aw Boon Haw, the brother with the more aggressive streak was known as the ‘gentle Tiger’. He refined his father’s traditional herbal balm recipe and from a humble beginning of making the balm in his mother’s kitchen, the business bloomed to such an extent that sales reached $10 million by 1926.

The early success of the business could be attributed to the marketing savvy of Mr Aw. He cleverly named his product after the powerful tiger and packaged it in what has become the brand’s distinctive hexagonal jar.

He also built an extensive distribution network, with virtually every Chinese shop in Rangoon stocking the balm, printed his own posters, and went around the town in search of walls to paste them on.

In the late 1920s Aw Boon Haw also had the foresight to expand to overseas markets such as Singapore, where he established a manufacturing plant 10 times the size of his original plant back in Burma.

He personally visited many Malayan towns in his custom-made car with a Tiger-shaped fabricated head and gave samples of Tiger Balm to the villagers who had assembled to hear him and see his unique car.

Undervalued brand

nitinbook280Nitin Pangarkar’s book is available from Amazon by following this linkThe company survived World War II, but faced its greatest challenge when it was taken over for a brief period in the early 1970s by Slater Walker securities.

Seriously underestimating the value of the Tiger Balm product line and brand, Slater Walker licensed marketing rights in all regions except Europe and the US to Thailand’s Jack Chia group. All for a rather meager minimum guaranteed sum of $2.74 million per year.

Under the arrangement which lasted 20 years, there was little investment in brand building. In fact, towards the end of the licensing period, the Jack Chia group launched its own competing brand – Lion Balm – for which it was subsequently sued by Tiger Balm.

That the Tiger Balm brand survived 20 years of neglect by the Jack Chia group is itself remarkable, especially considering that it was not difficult for competitors to copy Tiger Balm’s product or other aspects of its strategy.

Post-1991, having reclaimed the crown jewel by not renewing the licensing arrangement with the Jack Chia group, the new management of Haw Par (as Mr Aw’s company was called) expanded manufacturing capacity by establishing four joint ventures, hired Batey Ads (responsible for Singapore Airlines advertisements for a long time), and invested $10 million in an aggressive advertising campaign.

It also enhanced the geographic coverage of the distribution to new markets so that by 2008, Tiger Balm was available in as many as 60,000 outlets around the world.

Time for a tiger

Through product extensions such as pre-exercise rubs and neck-and-shoulder rubs for office staff as well as sponsorships of sporting events such as the LA and Boston marathons, Tiger Balm was also repositioned to target a wide range of ailments and a broad range of ages.

While some elements of the product were changed, several key elements which had built a loyal following such as the now famous hexagonal jar were retained.

By 2008 the rebranding and repositioning strategy had succeeded spectacularly – Tiger Balm’s biggest markets included the US and Europe, with a diverse customer base well beyond its traditional core market of immigrant Asians.

The key lesson of Tiger Balm’s story is that companies can succeed spectacularly by investing in durable assets. In other words, assets that have value beyond the current time period.

The ‘old’ Tiger Balm made these investments in brand creation and distribution; which ensured that the brand could be revived even after 20 years of neglect when it was licensed to the Jack Chia group.

Many SMEs tend to underinvest in durable assets such as distribution, brand building, and technology development in the belief that the gestation period of these investments is too long for them. They would be well-served, however, to learn from Mr Aw’s example that it is never too early to invest in these durable assets.

In fact, at times it may be too late to invest in them.

A version of this article appeared in the Business Times on March 27, 2012

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