Wednesday, May 31, 2006

Adidas vs Nike at the World Soccer Tournament

On June 9, the 2006 FIFA World Cup Soccer tournament will start.
The World Cup is a quadrennial event that thrives on high-octane international rivalries.
The last one in 2002 was watched by 28 billion fans worldwide, which makes it bigger than the Olympics or the Super Bowl.
The upcoming event will take place in Germany and is expected to be followed by 32 billion fans worldwide.
Needless to say, it offers wonderful marketing opportunities, both nationally and globally.
Since soccer (or European football) is not popular in the US, American brands are mainly targeting the 42m Hispanics domestically, who have $800 billion of spending power.

The FIFA World Cup™ is the most effective international marketing platform, reaching millions of people in over 200 countries throughout the world.
FIFA offers partners and sponsors a comprehensive marketing package, such as:
use of the Official Marks; exposure in and around the stadium; direct advertising and promotional opportunities and preferential access to FIFA World Cup™ broadcast advertising; use the official logo and create “artmarks” (new designs based jointly upon the official logo and their specific product category) and composite logos.

This year’s sponsors (who had to pay up to $200 for the privilege) include several global brands, such as Philips, McDonalds, Coca-Cola, MasterCard, Budweiser, Nike, and Adidas.

A famous soccer trainer once said: “soccer is war”, but it pales compared to the clash of the two sportswear giants Adidas and Nike.
This marketing battle is the most costly in soccer history, with Adidas spending around $226m and Nike an estimated $113m.

The German Adidas Group is the official sponsor of the World Cup and is profiling itself like no sponsor ever did before.
Adidas made sure that its sponsorship includes blocking Nike from TV advertising in the U.S. for all 64 games.
Its CEO Herbert Hainer made the Adidas position clear:
Our three-stripes logo will be everywhere.
For two years, we have had more than 100 people in a separate building working on the World Cup. We have set ourselves aggressive targets.”
Adidas’ financial target is to reach at least $1.56bn in football related sales this year.
But the real goal is clear: get archrival Nike, especially on Adidas’ home turf Germany.

Currently, there is not such a wide gap between the two giants.
Adidas has a market share of 28% (not including the US market) compared to Nike’s 31%.
In the US, Nike is still the leader, but Adidas is gaining ground in the American baseball and basketball market.
The only market where Adidas surpasses Nike is Japan, where Adidas sponsored the Japan national team in the 2002 World Cup and launched its innovative lightweight, thin-soled adiZero sneaker that hit the spot with Asian consumers.
Adidas is currently growing faster than Nike in other Asian markets, especially China, where it spent $80 million to be the exclusive sneaker sponsor of the 2008 Beijing Summer Olympics.

Adidas also changed its advertising and followed Nike’s lead with cinematic, edgy ads such as the World Cup campaign and spots featuring superstar David Beckham created by BWA\Chiat\Day.

Over the next few months, Adidas will spend about $200 million to market all things soccer, including shoes, boots, national team jerseys and soccer balls.
Its ad campaign, dubbed +10, revolves around the idea that one player plus 10 others equals a team.

Nike isn't about to concede any market share to archrival Adidas.
It is fortifying its market leadership in basketball and running gear and has the goal to be the No. 1 soccer brand in the world, according to its president Charlie Denson.
Since soccer is a wonderful way to build brand loyalty with children worldwide, Nike is targeting its audience the viral and digital way.
Nike teamed up with Google to create the world's first social network for soccer fans: www.joga.com.
This site was launched on March 15 and will rollout in 14 languages covering 140 countries and is a replica of the American top social network website www.MySpace.com.
It enables soccer-mad fans to commune with each other over their favorite players and teams, download videos, and create discussion groups.
The branding is clever - campaign and website are named after the Brazilian phrase "joga bonito," or "play beautifully."
Fans who join Joga.com or visit Nike's site can sift through layers of video clips, messages, and ads involving Nike's star players as well as watch videos about the magic of soccer in different nations.
Fans can then download the clips to their iPods, computers, wireless phones, or portable PlayStations.

Finding out who will be the next world soccer champion might be interesting, but for me, the highlight is the Adidas vs. Nike game!

Tuesday, May 23, 2006

The changed face of global luxury brands

Luxury brands have a global appeal.
For years, Paris, London and New York have been the luxury style capitals of the world.
This has changed - Shanghai, Mumbai and Moscow have entered the global arena.
Their influence is not limited to having Prada fashion shows, local Armani boutiques or Bentley dealerships, but also setting trends.
As a result, the consumer profile of luxury goods has changed - and companies acted.

Especially the Chinese love luxury brands.
According to Ernst & Young, there will be around a quarter of a billion Chinese consumers who can afford luxury products in 2010.
Needless to say, companies maximized on this unique chance of business expansion: Giorgio Armani ( 30 new stores by the end of 2008); Louis Vuitton (13 new stores n 2007); Bulgari (6 new stores in 2006); Dolce & Gabbana (entering the Chinese market in 2006 with outlets in Shanghai and Beijing); Montblanc (200 shops countrywide by 2010).
In second place is India.
India doesn’t have luxury shopping malls or districts, which is a hurdle for opening branches. Notwithstanding, Burberry, Christian Dior, Gucci, Cartier, Chanel, Omega, Hugo Boss, Louis Vuitton and Versace want to get a foothold in the Indian peninsula during 2006.

Asian women are highly sophisticated and influential.
L'Oréal for one quickly realized that it had to cater to a whole new group of consumers.
Apart from the anti-aging and anti-wrinkle cream craved by American and European women, the cosmetics producer has to meet the Chinese and Indian demand for whiter skin.
The "wet lipstick" (the big runner in 2005) originated in the Asian market and was only later successfully launched in Europe and America.
Let's not forget the matter of local tastes - eye shadow colors must be bold in India, where the Bollywood-style reigns.

Needless to say, there is a difference between the affluent middleclass (looking for brandname products) and the megarich, who live by the same rules as their Western counterparts.
Their tastes follow the same pattern: designer clothes, real estate, art, and private jets.
Since they move in the same circles, there is an interesting cross-cultural osmosis.
As a result, a brand’s ethnicity is no longer an indicator of where its owners are from and where the goods are produced or sold. It forced companies to go global and leave their national image behind.
L'Oréal bought the Chinese cosmetics label Yue-Sai and Chinese entrepreneurs bought European labels Asprey, Mulberry and Lanvin. Apart from "foreign" ownership, production is ofter outsourced to low-wage countries. As a result, the "made in" label has lost much of its snob appeal.
Prada’s CEO Patrizio Bertelli caught the zeitgeist best by announcing that the Made in Italy label would be replaced by Made by Prada.

Tuesday, May 16, 2006

Marketing to technical managers

Marketing in the high-tech sector consists mainly of B2B (business-to-business)
A technology company that has a hot product or IT service needs to reach out to the relevant managers at the potential customer’s end.

The sales cycle starts with contacting a product management or R& D manager and to convince him/her of the benefits of the company’s product or service.
In most cases, these managers have an engineering background.

The first step is (of course) market research and getting the names and current job position of the managers.
Ideally, the company should have an idea of their interests and (technical) background as well.
The geographical area is important as well.
As the CMP Electronics Group published in a recent research, engineers in India are passionate about gathering information from nearly every media, especially in podcasts and video.
Their Japanese counterparts on the other hand, still rely on print and vendor websites, attending trade shows and having face-to-face events.

The next step is to find the best way to reach them.
Despite the decline in tradeshow attendance (although is seems to be picking up lately), companies still send their IT managers to scout for new products and technologies, to identify new trends and (of course) to check out the competition.
Arranging meetings and giving presentations at tradeshows and conferences is still effective and worth the time and money.

Webinars are gaining influence as well since they are convenient and cost effective.
As a PR tool for a company, webinars are tricky.
The webinar must have the form of a technical lecture (university level) to satisfy IT managers, but must be more general for marketing and sales managers, who don’t like tech talk.
The best option is to create separate ones and not to try and combine it in “one-webinar-fits all”.

What media should be used to reach out and communicate with IT managers and the like?
To communicate with IT managers, it is important to create a media mix of printed and online media.
The main sources used for learning about new technologies, trends and products are still industry publications (such as trade magazines) and vendors and manufacturers websites as well as blogs and online newsgroups.
Only a small minority uses the latest media such as RSS feeds and podcasts.

The form is important.
Engineers are first and foremost looking for downloadable data sheets, white papers, application notes, and product specifications.
When scouting for new product, price and product information is important.
They like to check out the source (manufacturer) and are less interested in the information supplied by the local distributor.
For further explanations, they do like to communicate with the local representative in their own language.
Don’t assume that all engineers have an impeccable grasp of English.
Some technical or industry terms are used differently throughout the world.
Needless to say, the representative must have an in-depth knowledge of the manufacturer’s products and technology.

As a marketing professional, never underestimate that no matter what, engineers are engineers are engineers, no matter their age, sex, nationality or media preferences.

Tuesday, May 09, 2006

Marketing:Impossible

Gimmicks sell, and coming up with something original to promote a product is great.
But you have to be clever and careful, something that the creative brains behind the Mission: Impossible:III overlooked.

The marketing department of Paramount came up with the brilliant idea to place approximately 4,500 digital music players in newspaper dispensers.

As soon as the newspapers rack would open, the programmed unit would play the Mission: Impossible theme.
That may sound great, but is not the cleverest thing to do in this post-9/11 era.

A Los Angeles Times reader in Santa Clarita inserted his quarter, opened the lid, and saw a small plastic box with a few wires poking out of it sitting on top of the papers.
Needless to say, he didn’t perceive a clever marketing gimmick but a bomb.
Correctly so, he immediately called the Los Angeles County Sheriff's Department, who dispatched an arson and explosives team to investigate.
Within half an hour, the efficient bomb squat checked the red plastic box that had wires sticking of it and rendered it useless (aka blowing it up).

Later the same day, law enforcement officials received several more calls along the same lines. By that time, the various law enforcement departments had received word of Paramount Pictures about its brilliant marketing campaign.

Needless to say, the Los Angeles Times gave permission for the gimmick.
As they put it, it was Paramount's aim to "turn the everyday news rack experience" into an
"extraordinary mission."
It is not known if the around 2.4M. daily readers of the LA Times share this sentiment.

So what went wrong? Well, the music players weren't supposed to be visible.
That makes me wonder: did anyone check after putting them in?
They obviously forgot one of the golden rules of marketing and PR:
Check, check and double check!