ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS
Watch out Coke. Pepsi-Cola’s Mountain Dew is making a splash with teenagers and
sending the brand’s sales soaring.
Pepsi-Cola over the years has transformed Mountain Dew, its neon lemon-lime drink
with a caffeine kick, from a soft-drink with a hillbilly theme to a
cutting-edge brand
that’s grown faster than any other. In 1997, Mountain Dew’s sales volume shot up 13
percent, far outpacing the overall sales growth of about 3 percent in the carbonated softdrink segment.
Industry experts have contributed Mountain Dew’s stellar growth to its far-sighted
promotional strategy and a consistent promotional message that has changed with the
times without radical shifts in positioning. The image that Mountain Dew has portrayed
over the years in its advertising is a tight link between thirst quenching and teens having
an outrageous time with the brand outdoors. Although Pepsi has made subtle changes to
contemporize the brand over the last twenty years, it has not deviated far from its core
market of fun-loving, high-energy teens.
Mountain Dew’s advertising shows why the soft drink is the most popular brand
among teenagers and college kids. Dedicating about $40 million a year in media
advertising, Mountain Dew spots feature hip-looking youths watching or participating in
daredevil stunts and extreme sports. Mountain Dew ads have been wildly popular with
teen-agers and young adults, with 31 percent giving the ads high popularity marks. One
such television ad shows a teenage boy and a teenage girl skysurfing off opposite
mountains, meeting in mid-air to share a Mountain Dew. The girl seductively whispers in
the boy’s ear, “Let’s be friends,” as she pulls the cord on his parachute while swiping his
Mountain Dew. Two other popular spots feature Olympic Gold Medal track star Michael
Johnson in a spoof on time travel and a boy and a girl snowboarding to a tune from the
musical West Side Story. Both spots use the theme: “Do the Dew.”
Mountain Dew’s sales promotion activities are not to
be overshadowed by its high-budget advertising
counterpart. In one of the most innovative promotions
ever, Mountain Dew gave out over 250,000 pagers to
teenagers who sent in ten proofs of purchase plus
$29.99. Besides the pagers, consumers received six
months of free airtime. In addition to normal paging
functions, the pagers were programmed to receive
Extreme Network announcements once a week alerting
teens to special offers and giveaways worth $50
million in merchandise from Mountain Dew and twentysix other “Extreme” partners including MTV, ESPN,
Burton Snowboards, Killer L o o p s u n g l a s s e s , a n d S o n y
Music. Not only did the pagers tap into a teen trend,
they also enabled Mountain Dew to create and wire its
own teen network directly.
Complementing Mountain Dew’s traditional media advertising and sales promotion is
a savvy public relations plan designed to influence those free-spirited youths it targets.
Mountain Dew’s long-standing association with extreme sports, such as its sponsorship
of the ESPN’s X Games, has made it a favorite of the high-energy set. Mountain Dew
also is the sponsor of an extreme mountain biking team that routinely competes in the X
Games.
Although Mountain Dew now enjoys a prominent rank in the soft-drink market, it
faces the enviable challenge of keeping momentum in the face of new competition from
Coca-Cola’s Surge, which was rolled out to most of the country in 1997 and 1998.
Although Surge is still a long way from catching up with Mountain Dew’s impressive
growth and market share, the introduction of Surge has helped build the segment for
caffein-ated soft drinks. See the latest promotional efforts from Mountain Dew at Pepsi’s
Web site, www.pepsi.com.1
How do advertisers like Pepsi-Cola decide what type of message should be conveyed to promote
Mountain Dew to teenagers? What types of appeals and executional styles are most effective? How does PepsiCola decide which media to use for Mountain Dew to reach its target consumers? What are the benefits of sales
promotion and public relations to advertisers such as Pepsi-Cola? Answers to these questions and many more
will be found as you read through this chapter.
Global Perspectives
Global Challenges for Advertisers
One of the hottest debates for global advertising professionals today is whether to
customize or standardize advertising. On one side of the fence are those who believe the
advertisement’s appeals and execution style should be tailored to each country or region
to be most effective. Because cultures perceive and react to advertising differently, this
school of thought advocates that the advertiser must know something about the intended
audiences’ culture in order to communicate effectively.
Kodak, for instance, favors a customized approach to advertising in
China because cons umer tastes and values vary between mainland China
and the more progressive
Taiwan and Hong Kong. In Taiwan and Hong
Kong, which are quickly catching up to the United States and Europe in
film sales volume, Kodak targets a young, innovative audience. In
mainland China, which is comparatively far behind technologically except
in a few urban centers, the approach will be more lifestyle oriented.
Some would disagree with this distinction, however, and would advocate a single
advertising campaign for all countries. Following this standardized approach, an
advertiser would develop one advertising campaign, appeal, and execution style and
deliver this same message, translated into the language of each country, to all target
markets. Supporters of this approach insist that consumers everywhere have the same
basic needs and desires and can therefore be persuaded by universal advertising appeals.
Furthermore, they say, standardized advertising campaigns create unified brand images
worldwide and the advertiser eliminates the inefficiencies of trying to re- invent the
meaning of its brand in every country. Athletic shoemaker Reebok recently embarked on
a $100 million global ad campaign in an attempt to make its message more cohesive
throughout the world. In the past, Reebok sent out confusing messages—it was known as
a running shoe in the United Kingdom and a fashion statement in the United States.
Moreover, Reebok generally was seen as a women’s fitness and aerobics sneaker, not an
ideal image for winning over male consumers.
Possibly the best answer to this dilemma is to use a mixture of standardization and
customization—that is, standardizing the message while paying attention to local
differences in the execution of the message. For example, Unilever uses a standardized
appeal when promoting its Dove soap but it uses models from Australia, France,
Germany, and Italy to appeal to women in those places. Although this mixture of
standardization and customization seems to be successful for many global marketers, it
only works as long as the message truly plays to a worldwide audience. For example,
because parents around the world are deeply concerned about the welfare of their
children, advertising for childrens’ products generally represents an area of universal
concern or agreement. Fisher-Price, therefore, is effective using a standardized approach
because no matter where they live, parents want the best for their kids. Similarly, IBM
was successful with its “Solutions for a Small Planet” campaign because people all over
the world have similar information and computing needs. The global imagery of the
campaign is achieved through the use of the same footage in each country. The difference
is the use of local subtitles to translate the “foreign” language of the commercial.
Although efficiencies can be achieved by producing a single advertising campaign
and message for worldwide use, the approach only makes sense if it does not run counter
to social mores, ethnic issues, or religious taboos. For example, a food commercial
showing hungry kids licking their lips would be taboo in a country where exposing the
tongue is considered obscene. Similarly, an ad portraying a young couple running
barefoot, hand-in-hand down a beautiful, sandy beach would be offensive in a country in
which naked feet are never to be seen by the public.25
Some of the marketers discussed here have been successful using a global approach to
advertising, but not every product or service is suited for a unified advertising message.
What types of products do you think would benefit from a standardized approach to
advertising? What types would fare better using a tailored approach?
Entrepreneurial Insights
Web Ad Broker Start-up Helps Marketers Reach the College Crowd
Marketers who want to hit the college crowd in their on-line media buys but don’t know
where to start have an ally. Their link to the college market lies with Future Pages
College Network, the Internet’s leading collegiate advertising broker. Future Pages
provides custom advertising solutions for marketers wanting to reach the 12.5 million
college students age eighteen to twenty-four who access the Internet on a regular basis.
Future Pages’ core business is brokering ads for over 110 on-line college publications
across the country reaching a potential student body of about two million. The St. Paul,
Minnesota-based start-up partners with on-line college publications to reach students at
schools such as Boston University, Duke University, Harvard University, and Stanford
University. Banner ads brokered through Future Pages cost marketers $35 per thousand
impressions.
Since its launch in 1996, Future Pages College Network has attracted some heavyduty marketers. Internet music site SonicNet, for instance, recently launched an end- ofschool-year on-line effort to gain recognition among college students in its quest to top
MTV’s on-line music site. Computer software giant Microsoft recently advertised
through the Future Pages College Network offering free copies of its Internet Explorer
browser to students, as well as an introductory campaign for its new Windows 98
operating system. Future Pages has also completed successful campaigns for Paramount
Pictures’ Star Trek and Encyclopaedia Britannica.
Advertising through on-line college newspapers is complemented by Future Pages’
partnerships with Internet sites frequented by college students and educators. Advertising
placed on sites where students like to hang out helps marketers carry their message even
further than on-line college newspapers alone. Some important sites in Future Pages’
network include theglobe.com, a virtual community of 960,000 subscribers mostly in the
eighteen to twenty-four age group; TWEN, The West Education Network, an on-line
learning center for law students; Collegebeat.com; an on-line community of colleges and
universities; and Virtual Stock Exchange, a destination site for college students
participating in the Virtual Stock Exchange game.
Cross-promotional opportunities are also available to Future Pages’ advertisers. With
its off-line network, Future Pages provides advertisers access to alternative campus media
such as campus billboards, inserts, and custom publishing, campus posters, and ads on
newspaper distribution stands.
Future Pages got its start by helping small business owners create their own mini-Web
sites in a small business directory. Feeling that they were not focused enough, founders
and former fraternity brothers Lance Stendal, 28, and Tom Borgerding, 24, turned to Alan
Fine, president of Strategic Management Solutions and professor at the Carlson School of
Business, University of Minnesota. Fine encouraged Stendal and Borgerding to find a
niche on the Internet in which they could excel. Knowing that almost all college students
were on-line and that most college newspapers had an on-line presence, Stendal and
Borgerding narrowed their focus by becoming the middleman between the advertiser and
the college newspaper. Now the company brings together major marketers such as
Microsoft and Sprint with on-line college newspapers such as Arizona State University’s
State Press, the Harvard Crimson, and the University of Texas’s Daily Texan.
Borgerding, vice president of marketing and sales for Future Pages, feels that the
benefit of their network partnership extends beyond advertisers alone. “Our mission
focuses not only on providing advertisers with the best Internet tool to reach this market,
but also helping to foster education to the partners we work with. We strive to create
successful campaigns and at the same time help the schools by educating them about
Internet advertising.”40
You can visit Future Pages’ Web site at www.futurepages.com.
Ethics in Marketing
Cigars Become the Darling of Hollywood
Tobacco has long enjoyed a comfortable relationship with Hollywood. Since the 1930s,
cigarettes have been found between the lips
of sexy stars, such as Bette Davis,
Humphrey Bogart, and Lauren Bacall. In Bogart’s day, cigarettes became the ultimate
accessory in movies with a little financial support from big tobacco. Later, when cigarette
advertising was nudged off television, the pressure for product placement on the big
screen intensified. One example comes from the leaked documents of tobacco company
Brown and Williamson, which apparently paid Sylvester Stallone half a million dollars
for brand placements in five of his movies.
Today, however, it’s just as likely to see a cigar in a movie as a cigarette. Like
their cigarette counterparts, cigar manufacturers routinely hire product-placement
firms to get their products on the big screen. In the box office hit Independence
Day, the pilot played by Will Smith couldn’t save the world unless he had a cigar
in his pocket. Arnold Schwarzenegger, Mr. Freeze in Batman & Robin, lights up a
cigar in a big cloud of blue smoke. A ci- gar conveys status as it is placed in
Tom Cruise’s mouth in the hit Jerry Maguire. Actors lit cigars in 51 of 133 movies
with a domestic box-office draw of at least $5 million in the most recent film
survey by the American Lung Association. In 20th Century Fox’s Independence
Day, cigars appeared in twelve scenes, or once every 12.5 minutes.
How much marketing punch have cigars in the movies had on the cigar industry?
Although a direct correlation can’t be made, it should be noted that after a twenty-year
decline, U.S. sales of cigars have jumped 53 percent to 5.2 billion cigars since 1993—
proof that the stogie of old is no longer stodgy. Although other factors have certainly
helped ignite the current cigar craze, Hollywood has definitely contributed to its
“coolness.” Although cigar smoking in and of itself is a choice consumers make, what
alarms many is the increase in popularity of cigars with teenagers. A 1996 survey
sponsored by the Centers for Disease Control and Prevention found that 27 percent of
U.S. teenagers, or six million, have smoked at least one cigar.
Federal and state regulators, alarmed about booming sales of
cigars and their sudden
popularity among teenagers, are about to end the decades of leniency toward the cigar
industry (most tobacco bills pending in Congress are silent on cigars). The Federal Trade
Commission recently ordered five cigar makers to file advertising and marketing
expenditures and told three of the five to report what they spend to have their cigars
featured in movies. California’s Department of Health Services recently used several
hundred thousand dollars from the state’s thirty-seven-cents-a-pack tobacco tax to combat
movie and television smoking and smoking sponsorship of sports and community events.
The cigar industry, meanwhile, is voluntarily restricting the practice of putting cigars
in celebrities’ hands. The board of directors of the Cigar Association of America said it
would “admonish” its members to stop paying Hollywood brokers for product placements
in movies and television.66
Do you feel that product placement in movies and TV for controversial brands is
unethical? Do you believe there should be laws governing this promotional practice?
Closing 5
Try making up a crossword puzzle for the key terms in this part. Writing the clues will
help you remember the definitions and the context of each concept. Check your progress
by using the Grademaker Study Guide.
marketing miscues
Advertising Abroad Can Create Headaches for Multinationals
Advertising in foreign countries often leads to embarrassing situations for U.S.
multinational marketers. In a spot that ran briefly on Peruvian television, Africans
are seen getting ready to devour some white tourists until they are appeased by
Nabisco’s Royal Pudding. Nabisco initially responded that although the
commercial was “inconsistent” with company values, the Peruvian audience saw
it as “a fantasy situation that was humorous in nature, and effectively
communicated people’s preference for Royal Desserts over all else.”
After realizing that its explanation of local taste tests as justification for a racially
insensitive ad was, to say the least, weak, Nabisco quickly moved to consolidate control
of its international advertising under Foote, Cone & Belding in New York in an effort to
keep ad campaigns more uniform. In a statement from Ann Smith, Nabisco’s director of
marketing and communications, the company wanted to “ensure that the quality of our
ads meet the standards we set for our brands.” The spot, she adds, was “a mistake.”
In a separate but similar incident, a sketch on a popular Peruvian television show featured a Michael Jackson
character complaining that his “son,” played in black face and having a tail, looks “too black,” prompting him to
beg a doctor to bleach the boy’s skin and cut off his tail. The show was sponsored by such major corporations as
Chesebrough-Ponds, Procter & Gamble, PepsiCo, and Quaker Oats. To add to the insult, the characters of the
popular show are featured in a commercial for Goodyear Tire & Rubber Co. shuffling around and stating that
“Goodyear tires are as strong as a black man’s lips.” Good-year quickly pulled the ad after its U.S. executives
saw it and fired the Lima, Peru, agency that produced the tire ad. It also promptly issued an unsolicited apology
to the NAACP even though the ad ran only in Peru for one week. Although the company determined it would
be impractical to impose central review of all international advertising from its U.S. base, as Nabisco did, it
stepped up sensitivity training for local managers and suppliers around the world.
Like a number of multinational companies, Nabisco and Goodyear were forced to address
concerns about how to adapt sales pitches to foreign markets without violating domestic
sensibilities. Such situations shed light not only on how far some ad agencies will go to
create striking messages but also on how a lack of internal controls at agencies can cause
problems. Because local units of international ad agencies aren’t typically required to
consult with parent companies when creating ads for domestic audiences, racially
insensitive or otherwise controversial ads, such as those for Nabisco’s Royal Pudding and
Goodyear tires, sometimes slip through.
Questions:
1. What steps can a multinational company take, in addition to issuing ad guidelines, to
ensure that embarrassing promotional situations like those discussed
do not occur?
2. Assume that you are the international advertising manager for a large consumer
products company. Write a brief list of ad standards pertaining to creative and media
selection to which your foreign ad agencies would be required to adhere.
SOURCES: “1997: Ad Follies,” Advertising Age, 22 December 1997, p. 14. “Tire
Maker’s Racist TV Ad Causes International Blowout,” Michigan Chronicle, 22
December 1997, p. 6-A. Pichayaporn Utumporn, “Ad with Hitler Causes a Furor in
Thailand,” Wall Street Journal, 5 June 1998, p. B8. Leon E. Wynter, “Global Marketers
Learn to Say No to Bad Ads,” Wall Street Journal, 1 April 1998, p. B1.
critical thinking case
Nike, Inc.
The year 1998 will be remembered in the athletic footwear industry as the end of one
marketing era and the beginning of another. In that year, consumers caught the world’s
leading sport-shoe maker Nike off-guard with a sudden fashion shift away from the flashy
basketball shoes the company made famous, as well as a cultural rejection of the brash
athletes that wore them and promoted them. As a result, Nike was faced with a difficult
dilemma: how to reinvent the meaning of Nike.
The Nike Story
In 1957, the future cofounders of Nike, track coach Mike Bowerman and student Phil
Knight, met for the first time at the University of Oregon in Eugene and began what
would become a lifelong relationship. Five years later, after completing his MBA, Knight
speculated that low-priced, high-tech, well-merchandised athletic shoes from Japan could
end Germany’s domination of the U.S. athletic shoe industry. Contracting with a Japanese
company, Onitsuka Tiger, to supply the shoes, Bowerman and Knight formed a
partnership with $500 each and started Blue Ribbon Sports, the progenitor to Nike.
By 1971, Bowerman and Knight decided to end their relationship with Tiger to
manufacture their own line of athletic shoes that would push the boundaries of comfort
and lightness. What emerged was a brash, young, entrepreneurial company named after
Nike, the Greek goddess of victory. Less than a de-cade later, Nike claimed 50 percent of
the U.S. running shoe market.
The introduction in 1979 of Nike-Air cushioning, a patented gas pressurized inside a
tough, flexible urethane shell to cushion impact, represented a major revolution in athletic
footwear design. Sales shot upward as Nike continued to improve on the air-cushioned
shoe, introducing the Air Max in 1987 that provided a see-through window in the
sidewall of the outsole and ending 1990 with more than $2 billion in revenue. No longer a
small company, Nike now sold shoes in more than forty countries across the globe.
Nike’s Marketing Machine
Nike’s marketing and advertising evolved along with its innovations in more comfortable
and lighter sport shoes. Pairing with Portland, Oregan, advertising agency Wieden &
Kennedy in 1982, the two companies generated the kind of creative fireworks that made
Nike’s swoosh a cultural icon and its irreverent “Just Do It” theme synonymous with the
sporting experience and athletic competition all around the world. The campaign, which
debuted in 1987, is considered one of the best ad campaigns in history, taking Nike from
an 18 percent share of the domestic sport-shoe business to 43 percent.
A large part of Nike’s marketing strength lies in its lucrative athletic superstar
endorsements with the likes of Michael Jordan, Charles Barkley, Bo Jackson, and John
McEnroe over the last two decades. In exchange for endorsement money, star players
sport the company’s trademark swoosh on the game floor and in television commercials,
increasing Nike’s “coolness” factor among its many fans.
Nike’s fiscal 1997 global marketing budget, which included athlete endorsements and
media advertising, was an estimated $891 million. Measured media advertising, such as
print and television, commanded $159 million of this figure. Nike produces some one
hundred fifty to two hundred television commercials every year.
The Sport-Shoe Market Cools
From 1994 to 1997, Nike experienced phenomenal growth and soaring revenues. Sales
grew almost two and a half times from $3.8 billion in 1994 to an astonishing $9.2 billion
in 1997. At the end of 1997, Nike’s market share of the athletic shoe market was 47
percent, three times that of its nearest competitor, Reebok International, with 15 percent.
The ranks of Nike employees also ballooned from 9,500 employees to 21,800 employees
worldwide.
Then, the bottom fell out in 1998. Although the entire athletic shoe industry took a hit
as casual and “athleisure” footwear gained in popularity, Nike was hit especially hard.
The industry leader posted fiscal 1998 sales of $9.6 billion, up 4 percent, but its fourthquarter footwear sales plunged 11 percent in the United States. Sales in the United States
plunged another 13 percent in its first quarter of the 1999 fiscal year. Nike was left reeling,
withmillionsofboxesofunsold athletic shoes and apparel. Nike CEO Knight blamed an
oversaturation of signature products (those products endorsed by star athletes) combined
with consumer dismay about athletes’ antics for sluggish sales industry-wide of
basketball and cross-training shoes, the biggest segments.
Consumer aggravation with the bad-boy behavior of professional athletes, those stars
who provided the backbone to Nike’s cool image, certainly contributed to the company’s
sales decline. Sports professionals’ antics, like Dennis Rodman’s insolent behavior on
and off the court, Charles Barkley’s legal troubles, Allen Iverson’s drug problems, Latrell
Sprewell’s alleged assault of his coach, and sportscaster Marv Albert’s sex scandal,
eroded the effectiveness of sports star endorsements. Sports star misbehavior even
invaded the college level with the gambling scandals at Arizona State University.
Further, experts believe Nike’s brand ubiquity contributed to the hit. Consumers,
saturated with Nike products and Nike-endorsed sports stars, were burned out on the
swoosh. The company, which for so long had reveled in its underdog status, was now the
top dog and could be found everywhere.
Nike’s stumble can also be blamed partly on its misjudgment of America’s youth, who
traditionally drive the footwear market. College students railed against Nike for its
alleged exploitation of child labor in Asia and for its overcommercialization of sports.
Teens into extreme sports resented Nike’s intrusion into their sports. Kids knew Nike not
as the rebel it once was but as the establishment. Nike had lost its “coolness” with
America’s youth market, who were turning to brown shoes—hiking boots and walking
shoes—over Nike’s flashy sneakers. Brown shoes now make up about 10 percent of the
athletic footwear market and this segment continues to grow.
Nike’s Response
The marketing formula that worked for Nike in the
past—athlete endorsers, flashy shoes, and brash
advertising—was crumbling. The company quickly
launched the kinder and gentler “I can” advertising
c a m p a i g n , which broke away from the dei f i e d - a t h l e t i c - e n d o r s e r
model that elevates star athletes to the status of the
gods. Instead, the “I can” campaign encompassed
messages about products, new technology, community
involvement, and athletes—professional and everyday—
on a more human scale. The swoosh was noticeably
absent from the ads. After a few months, though, the
s o f t e r “ I c a n ” a d s faded away, with Knight calling t h e
effort “ineffective.” The campaign was followed with
the “What are you getting ready for?” campaign that
positioned sports training as integral to the average
person’s lifestyle, focusing on running instead of
basketball.
As a result of the downturn, Nike slashed its global marketing budget by $100 million,
including athlete endorsement money. Although Nike has let some athlete endorsement
contracts expire, it insists that it is not abandoning its athletes, but instead is rethinking
how athletes are depicted in ads, moving away from the rhetoric that characterized past
marketing campaigns in favor of lower-key approaches. In the latest “What are you
getting ready for?” campaign, celebrity athletes were used sparingly, almost
anonymously, fulfilling the function of making a product point or a joke that superseded
their star personalities.
The Competitive Scene
Nike’s competitors did not miss the chance to gain from Nike’s slump. Ads from Reebok,
the number two sport-shoe marketer, focused on technology and performance, rather than
cocky sports superstars, as center stage in their athletic footwear branding campaigns. In
a gutsy move, Reebok dropped Shaquille O’Neal as an athlete spokesperson. Reebok
commer-cials introducing its Icon DMX 10 running shoe featuring new cushioning
technology even took a definitive anti-Nike stance. The first spot featured six thousand
runners, all clones labeled with the same number—97005, the ZIP code for archrival
Nike. The ads were designed to make a statement about the current athletic shoe industry
in which all brands look alike and talk alike in an attempt to catch up with Nike.
New Balance, long known for its product focused and “endorsed by no one”
advertising stance, tripled its ad budget to launch its ordinary-person-centered “Achieve
New Balance” campaign. The ads focused on the theme that sports are important but
they’re not all that people do. New Balance’s campaigns relied on running themes instead
of basketball, a sport that demographic research suggests turns off teens and young adults.
The backlash against traditional sports like basketball by teens and young adults has
created a market for alternative brands, such as Airwalk and Vans, to dominate. Airwalk,
which straddles fashion and performance with products grounded in alternative pop
culture and extreme sports, tripled its U.S. television ad budget in 1998. Airwalk and
Vans have also initiated major efforts to sell and promote their shoes through their Web
sites.
Future Marketing and Advertising Efforts
As Nike struggles with the vision of what its future identity should be, several marketing
and advertising efforts may possibly push it further along in its quest. New advertising
campaigns will focus on Nike’s latest technological advance in running shoe design—
Visible Zoom Air, or VisiZoom. The innovation consists of thousands of small fibers
surrounded by compressed gas that provide enhanced spring action. Because the
technology occupies a thinner space, it allows for ultimate responsiveness while
maintaining a low profile close to the ground.
Whereas shoe innovations have been harder to come up with in recent years, Nike is
revving up its marketing machine with the introduction of the Alpha program. Under the
program, Nike will market its most expensive apparel, sporting goods, and sneaker
products as a unit—or under the same “halo.” For example, an ad might feature an athlete
wearing a Nike watch, Nike sunglasses, a Nike jacket, and Nike sneakers. Certain “Alpha
Athletes” such as Tiger Woods will be seen wearing Nike from head to toe and even have
a say in the products’ designs.
Nike is also charging head-on into sports it does not currently dominate, most notably
soccer.
The company poured $40 million in advertising into World Cup ’98 telecasts to
increase its visibility in the sport. Six World Cup ’98 teams—Brazil, Holland, Italy,
Nigeria, South Korea, and the United States—competed in
uniforms designed by
Nike.
Questions
1. Since the success of its long-running “Just Do It” advertising campaign, Nike has been
struggling with a new identity. What advertising strategies and themes would you
suggest Nike undertake to reconnect with its customers?
2. In the past, professional athletes were not always chosen to endorse a company’s
product because of their role model behavior on and off the court. In light of
consumers’ current attitudes toward the transgressions of pro athletes, what role do you
feel they should play in a sport-shoe marketer’s promotional campaign?
3. With more, younger consumers turning to brown shoes and alternative sports, what promotional actions can
Nike take to become “cool” to the youth market?
4. Nike’s Alpha project plans to group the company’s best products together in
joint promotions. Group together several Nike products with a Nike athlete
endorser and write a brief advertising creative and executional plan.
5. Nike has been criticized in global markets for pushing its “bad-boy” image, as it
did in its U.S. advertising. Should Nike take a standardized or a customized
approach to its global advertising?
SOURCES: Nike Website at http://www. nikebiz.com. Nike Inc. 1998 Annual Report. Bob
Garfield,“Nike’sNew‘ICan’JustDoesn’tDoItasWel,”AdvertisngAge,19January1998,p.47.Jeff Jensen, “Athletic-Shoe Marketers Look for New Formulas,”
Advertising Age, 28 September 1998, pp. S-20, S-24. JefJensen,“ReebokBacksNewShoewithAnti-NikeStance,”AdvertisingAge,25
May1998,p.4Jeff
. Jensen, “Nike to Slice Marketing by $100 Mil,” Advertising Age, 23 March
1998, pp. 1, 46. Jeff Jensen, “Performance, Shoe Tech Take Ad Stage for ’98,”
Advertising Age, 12 January 1998, pp. 3, 36. Bill Richards, “Tripped Up by Too Many
Shoes, Nike Regroups,” Wall Street Journal, 3 March 1998, p. B1. Joan Voight and
Eleftheria Parpis, “Where Did the Magic Go?” ADWEEK, 22 June 1998, p. 23.
Additional Readings
Alice Z. Cuneo and Jeff Jensen, “Fashion Trend-Setters Push to Stay ‘Hip’ with Youth
Niche,” Advertising Age, 5 October 1998, pp. S-22, S-24.
Pat Sloan, “‘Keeping It Cool’ Harder Than Thought, Even on a Budget,” Advertising Age,
20 October 1997, pp. S-8, S-24.
Questions
1.
Why is the company’s marketing communications of particular concern to
research and development and manufacturing?
Marketers have a tendency to refer to product quality in their communications with
potential customers. However, it is not the marketing department that has its hands in the
development and production of the actual product. The R&D and manufacturing groups
provide the physical product that marketing presents to customers. If a customer is
dissatisfied with the product’s quality, then it is typically the “hands-on” groups who are
blamed for the low-quality product.
2.
What is manufacturing’s role in the promotion of an existing product?
In general, manufacturing’s role is one of providing the supply necessary to satisfy the
demand that a marketing promotional campaign has created. However, it is imperative
that marketing and manufacturing work closely to link the promotional campaign to
product availability in a manner that will not increase the firm’s production costs. Also, a
production shortage during a promotional period could have long-term negative
ramifications on customer satisfaction.
3.
How has personal selling become functionally integrated?
There are many areas in which personal selling has become functionally integrated. One major change in the
salesperson’s skill set is the need to possess intimate knowledge of the products being presented to a customer. It
is no longer sufficient to have great personal interacting skills—the salesperson has to clearly understand the
products he or she is presenting. Another major area of integration has been the involvement of R&D and
manufacturing in customer visits. Finance, accounting, and human resources are taking a much stronger role in
the sales process with regard to compensation systems, cross selling, and teamwork.
Suggested Readings
Deborah Asbrand, “Why Sales Automation Is Now Succeeding,” Datamation, January
1997, pp. 80–84.
Jennifer Reese and Sally Solo, “How to Remake Your Sales Force,” Fortune, 4 May
1992, pp. 96–103.
exhibit A
Top Ten Athletic Footwear Brands
Share of
Share of
Measured
Measured
Market
Market
Advertising Advertising Rank
(%) 1996 (%)
1997 ($ million)
1996 ($ million)
1
Nike 47.0 45.2 159.0 149.0
2
Reebok
15.2 16.5 55.0 84.0
3
Adidas
6.1
5.4
21.0 14.0
4
Fila 6.0
7.7
15.0 13.0
5
Converse
3.5
2.7
8.0
5.0
6
New Balance 3.3
2.8
4.0
3.0
7
Keds 2.2
2.2
3.0
3.0
8
Airwalk
2.2
2.8
2.0
9.0
9
Asics 1.6
1.8
2.0
2.0
10
Foot-Joy
1.5
1.5
2.0
2.0
Total top 10 88.8 88.6 271.0 284.0
Total market sales $8,100.0
$7,200.0
$309.7
Brand 1997
$320.4
Note: Dollars are in millions. Measured media from CMR. Market share from
Sporting Goods Intelligence.
Source: Jeff Jensen, “Athletic-Shoe Marketers Look for New Formulas,”
Advertising Age, 28 September 1998, p. S-20.