Description
It explains the Presentation on Reebok. It starts with the history of the company and growth charted by the company. It describes the secrets to Reebok's success and the strengths of the company. It also talks about the advantages and disadvantages of Human Rights Now Program
• Founded in England in 1895 as J.W. Foster and Sons, a manufacturer of track shoes • Renamed Reebok in 1958. • North American distribution rights purchased by Paul Fireman in 1979 • Fireman and a few investors bought the parent company in 1984.
• First products Fireman imported to the U.S. were three models of high-end running shoes • 1982 – introduced The “Freestyle,”first shoe for aerobics, and first athletic shoe targeted at women • Ushered in rapid growth for Reebok as running mania subsided • Firm ranked top among major U.S. firms in sales growth, earnings growth & return on equity • 300 different shoes in 10 categories by 1988.
• The same time, company began diversifying into other products • Aerobic shoes dropped in share of total shoes produced from 56% to 29%
• Manufacturing was contracted out to firms in South Korea, Taiwan, China, Thailand, the Philippines and Indonesia • Labor disruptions and high demand resulted in supply problems in 1987 • Sold direct to retailers using a limited distribution strategy through a dedicated, commissioned sales force • Avoided mass merchandisers and discount stores
“Consumer preferences are constantly changing, and future progress is linked to our skill in understanding the messages sent from the marketplace so we can deliver the right products” Paul Fireman Reebok International,
Ltd.
• Ability to respond to consumers’ needs & desires • High brand recognition. – 1987 survey: 95% of athletic shoe owners were aware of Reebok v. 57% two years prior • 98% when only considering teens, who purchased more than three pairs of shoes per year – Unaided awareness of Reebok doubled between 1985 and 1987 • Compared with a drop by Nike on the same measure • 57% of teens dubbed Reebok the “in” shoe (38% for Nike)
• Market penetration – 52% had ever owned Reeboks (70% of the teens) – 45% were Reebok owners – higher than any other brand (customer retention is easier than acquisition) • High brand loyalty – 2 out of 3 consumers who last purchased Reebok intended to make Reebok their next purchase – Reebok owners more likely to purchase athletic shoes at regular price than non-owners
• Access to retailers through its direct distribution strategy • Field service and promotion representatives – Add value by travelling the U.S. teaching retailers and consumers about the products’ features and benefits • Well equipped to handle future supply shortages (like the ones in 1987) by manufacturing in multiple countries
? ?
Pre 1987
? ? ? ? ?
?
Innovative Vivid Adventurous Experimental Special Vibrant New
Comfortable Youthful Energy Fun Diverse Clean Leader A standard Middle class
?
?
1987
? ?
?
? ? ?
• Weekend warriors – use their shoes for sports but are not zealous athletes • Casual wearers – use athletic shoes only for street-wear –Largest segment: 80% of sales –Demand comfort and style
• Serious athletes – Smallest segment – Perceived by industry analysts to be opinion leaders for both of the other segments (“Pyramid of Influence”) – Led manufacturers to focus on the eliteness • Restricting new products to exclusive sports shops • Emphasizing technological breakthroughs that enhanced performance
• Category advertising – A variety of communications to promote specific product lines • “Reeboks let U.B.U.” umbrella advertising – Stress freedom of expression and individuality to rekindle the vitality of the Reebok name while maintaining the brand’s mass appeal • Olympics advertising – Associate Reeboks with sports to excite brand dealers • Energy Return System (ERS) – Performance-based print campaign to reach active sports participants
• $8M earmarked for category-specific print and television ads • $14M allocated to athlete endorsements and grassroots promotional events • Communications program for each category varies widely • Major category examples: – Basketball targeted young adults using performance-based TV ads and athlete endorsements – 73% of the tennis expenditures allocated to athlete endorsements and tournament sponsorship, along
• Increasing costs of Far East production puts pressure on margins • Retailers narrow selections to fewer brands • Shorter athletic shoe product life cycles • Competition intensifies in all categories • Shift in the way Reebok wearers talk about their shoes • Does Reebok need a new umbrella campaign? – Boost brand image – High awareness, market penetration, and
• Campaign objectives: – Stress freedom of expression and individuality – Maintain the brand’s mass appeal • Targeted at 18 to 34 year olds, particularly women • TV ads run during prime-time and late-night shows on cable channels such as MTV and ESPN • Print ads run (Aug-Dec) in fashion, entertainment, and life style or special-interest magazines – July editions of five athletic shoe trade
• Assured Reebok brand exclusivity in athletic footwear advertising during NBC’s television coverage of the Summer Games • Ads featured real people wearing Reebok shoes and engaging in street or yard sports – Example tagline: “Summer Games, Bronx, NY” – End commercial with slogan “And you thought all the excitement was in Seoul” • Expected to excite Reebok brand dealers
• A $600,000 performance-based print campaign featuring Reebok’s new Energy Return System • ERS design competes with Nike’s Air line and is intended to reach active sports participants – $75-90 per pair retail price range – Ads carry the slogan “The Revolution is Over” in response to Nike’s successful 1987 “Revolution” campaign
• Overall communications objectives – Boost brand image to be unique and exciting – Maintain mass appeal • Category advertising – Performance-based communications maintain credibility with opinion leaders – Fashion as a secondary focus captures broader market of casual wearer – Move toward standard core communications with subtle adjustments to tailor to specific categories
• “Reeboks let U.B.U.” – Necessary to meet objectives efficiently and effectively – Appropriate to both objectives • Message stresses self-expression and individuality • Placement of TV and print ads attempts to reach the mass market • Exception: Ad placement in July editions of trade magazines
• Olympics advertising – Summer Olympics are exciting and appeal to the worldwide mass market – Association with sports appeals to Reeboks dealers • Recommendation: Print ads should replace the “U.B.U” ads in July editions of trade magazines
• ERS new product advertising – New innovation is exciting and ads are appropriately performance-based • Reebok is not known for its innovative technology • Requires a brand image stretch, rather than a mere boost – Target market is the active sports participants • Print ads placed in hard core athletic magazines – Direct competition with Nike and niche competitors • Requires heavy television advertising
Objective is to reach young people with a positive message about Reebok • Advantages: ?Association with the most exciting event of the year ?High awareness(60%) and favourable attitude(49%) among Reeboks target market(18-34) ?1 lakh new members in the last concert
More Advantages: ?Mass pre-event, event, and post-event exposure ?Gels well with the UBU Umbrella campaign ? 18 concerts in 16 countries on 5 continents ? Extensive advertising, promotions, and public relations ?Worldwide Branding exercise
• Disadvantages: ?As the sole underwriter of the tour, the risks are high ?Financial risk: $2M tour expenses + up to $8M tour deficit + $5M marketing = $15M ?Potential negative tour publicity ?AI has the final decision on most aspects of the tour ?Net profits from tour merchandise donated to AI
1. Get other Sponsors on board, like Media Sponsor, Food sponsor, Travel Sponsor and Reebok can be Lifestyle partner 2. Launch special Human Rights Edition Merchandise and Shoes
doc_725292540.pptx
It explains the Presentation on Reebok. It starts with the history of the company and growth charted by the company. It describes the secrets to Reebok's success and the strengths of the company. It also talks about the advantages and disadvantages of Human Rights Now Program
• Founded in England in 1895 as J.W. Foster and Sons, a manufacturer of track shoes • Renamed Reebok in 1958. • North American distribution rights purchased by Paul Fireman in 1979 • Fireman and a few investors bought the parent company in 1984.
• First products Fireman imported to the U.S. were three models of high-end running shoes • 1982 – introduced The “Freestyle,”first shoe for aerobics, and first athletic shoe targeted at women • Ushered in rapid growth for Reebok as running mania subsided • Firm ranked top among major U.S. firms in sales growth, earnings growth & return on equity • 300 different shoes in 10 categories by 1988.
• The same time, company began diversifying into other products • Aerobic shoes dropped in share of total shoes produced from 56% to 29%
• Manufacturing was contracted out to firms in South Korea, Taiwan, China, Thailand, the Philippines and Indonesia • Labor disruptions and high demand resulted in supply problems in 1987 • Sold direct to retailers using a limited distribution strategy through a dedicated, commissioned sales force • Avoided mass merchandisers and discount stores
“Consumer preferences are constantly changing, and future progress is linked to our skill in understanding the messages sent from the marketplace so we can deliver the right products” Paul Fireman Reebok International,
Ltd.
• Ability to respond to consumers’ needs & desires • High brand recognition. – 1987 survey: 95% of athletic shoe owners were aware of Reebok v. 57% two years prior • 98% when only considering teens, who purchased more than three pairs of shoes per year – Unaided awareness of Reebok doubled between 1985 and 1987 • Compared with a drop by Nike on the same measure • 57% of teens dubbed Reebok the “in” shoe (38% for Nike)
• Market penetration – 52% had ever owned Reeboks (70% of the teens) – 45% were Reebok owners – higher than any other brand (customer retention is easier than acquisition) • High brand loyalty – 2 out of 3 consumers who last purchased Reebok intended to make Reebok their next purchase – Reebok owners more likely to purchase athletic shoes at regular price than non-owners
• Access to retailers through its direct distribution strategy • Field service and promotion representatives – Add value by travelling the U.S. teaching retailers and consumers about the products’ features and benefits • Well equipped to handle future supply shortages (like the ones in 1987) by manufacturing in multiple countries
? ?
Pre 1987
? ? ? ? ?
?
Innovative Vivid Adventurous Experimental Special Vibrant New
Comfortable Youthful Energy Fun Diverse Clean Leader A standard Middle class
?
?
1987
? ?
?
? ? ?
• Weekend warriors – use their shoes for sports but are not zealous athletes • Casual wearers – use athletic shoes only for street-wear –Largest segment: 80% of sales –Demand comfort and style
• Serious athletes – Smallest segment – Perceived by industry analysts to be opinion leaders for both of the other segments (“Pyramid of Influence”) – Led manufacturers to focus on the eliteness • Restricting new products to exclusive sports shops • Emphasizing technological breakthroughs that enhanced performance
• Category advertising – A variety of communications to promote specific product lines • “Reeboks let U.B.U.” umbrella advertising – Stress freedom of expression and individuality to rekindle the vitality of the Reebok name while maintaining the brand’s mass appeal • Olympics advertising – Associate Reeboks with sports to excite brand dealers • Energy Return System (ERS) – Performance-based print campaign to reach active sports participants
• $8M earmarked for category-specific print and television ads • $14M allocated to athlete endorsements and grassroots promotional events • Communications program for each category varies widely • Major category examples: – Basketball targeted young adults using performance-based TV ads and athlete endorsements – 73% of the tennis expenditures allocated to athlete endorsements and tournament sponsorship, along
• Increasing costs of Far East production puts pressure on margins • Retailers narrow selections to fewer brands • Shorter athletic shoe product life cycles • Competition intensifies in all categories • Shift in the way Reebok wearers talk about their shoes • Does Reebok need a new umbrella campaign? – Boost brand image – High awareness, market penetration, and
• Campaign objectives: – Stress freedom of expression and individuality – Maintain the brand’s mass appeal • Targeted at 18 to 34 year olds, particularly women • TV ads run during prime-time and late-night shows on cable channels such as MTV and ESPN • Print ads run (Aug-Dec) in fashion, entertainment, and life style or special-interest magazines – July editions of five athletic shoe trade
• Assured Reebok brand exclusivity in athletic footwear advertising during NBC’s television coverage of the Summer Games • Ads featured real people wearing Reebok shoes and engaging in street or yard sports – Example tagline: “Summer Games, Bronx, NY” – End commercial with slogan “And you thought all the excitement was in Seoul” • Expected to excite Reebok brand dealers
• A $600,000 performance-based print campaign featuring Reebok’s new Energy Return System • ERS design competes with Nike’s Air line and is intended to reach active sports participants – $75-90 per pair retail price range – Ads carry the slogan “The Revolution is Over” in response to Nike’s successful 1987 “Revolution” campaign
• Overall communications objectives – Boost brand image to be unique and exciting – Maintain mass appeal • Category advertising – Performance-based communications maintain credibility with opinion leaders – Fashion as a secondary focus captures broader market of casual wearer – Move toward standard core communications with subtle adjustments to tailor to specific categories
• “Reeboks let U.B.U.” – Necessary to meet objectives efficiently and effectively – Appropriate to both objectives • Message stresses self-expression and individuality • Placement of TV and print ads attempts to reach the mass market • Exception: Ad placement in July editions of trade magazines
• Olympics advertising – Summer Olympics are exciting and appeal to the worldwide mass market – Association with sports appeals to Reeboks dealers • Recommendation: Print ads should replace the “U.B.U” ads in July editions of trade magazines
• ERS new product advertising – New innovation is exciting and ads are appropriately performance-based • Reebok is not known for its innovative technology • Requires a brand image stretch, rather than a mere boost – Target market is the active sports participants • Print ads placed in hard core athletic magazines – Direct competition with Nike and niche competitors • Requires heavy television advertising
Objective is to reach young people with a positive message about Reebok • Advantages: ?Association with the most exciting event of the year ?High awareness(60%) and favourable attitude(49%) among Reeboks target market(18-34) ?1 lakh new members in the last concert
More Advantages: ?Mass pre-event, event, and post-event exposure ?Gels well with the UBU Umbrella campaign ? 18 concerts in 16 countries on 5 continents ? Extensive advertising, promotions, and public relations ?Worldwide Branding exercise
• Disadvantages: ?As the sole underwriter of the tour, the risks are high ?Financial risk: $2M tour expenses + up to $8M tour deficit + $5M marketing = $15M ?Potential negative tour publicity ?AI has the final decision on most aspects of the tour ?Net profits from tour merchandise donated to AI
1. Get other Sponsors on board, like Media Sponsor, Food sponsor, Travel Sponsor and Reebok can be Lifestyle partner 2. Launch special Human Rights Edition Merchandise and Shoes
doc_725292540.pptx