“Work faster little Jimmy, the World Cup is coming up!”

Besides my studies at the HWR I work partially in a sport store or more precisely, a Handball Store. Since the Handball world championship takes place in Spain these days our shop is booming. We are literally run over by enthusiastic fans who all were captured by the gigantic marketing machinery every big tournament brings along. In the beginning of January we got the newest collection of all handball brands such as Hummel, Select, Kempa or Adidas. MatchBalls, World cup shirts, shorts and shoes just launched for the upcoming championship.

It is super sweet to see all those little kids emulating and imitating their WM heroes or idols (Little kids is actually wrong, it´s a phenomenon to see how Dads become 12 again). The Question I heard most the last days wasn`t “Hey Mel, how are you?” but rather “Can you bring me the new Adipower stabil 10.0 in size 7.5?” or “Do you have the shoe that Nikola Karabatic is wearing?”

Our stores cash registers are ringing and so do the producer`s but what is so special about the marketing strategy that attracts so many fans and what is really behind all those expensive sport articles?

Tailor-made Commercial and Sponsorship

deutschland-tunesien-wm-514If you watch a match in the current world cup you can always see the new commercials for the new products at the electric banners on the sidelines. The German Car Company kfzteile.de /WM also tries to jump on the bandwagon by offering a 0.5% discount for every German Goal.

What´s really surprising for me is the fact that the advertisement does match to the current playing nationality. That means for German matches that there is always the DKB, intersport or mybet.de commercial. The highest German handball league hasn´t just a simple name like it is usual in soccer, like premier league or simply Bundesliga but it is titled after its biggest sponsor, the DKB Handball Bundesliga or former the Toyota Handball Bundesliga. This shows that handball is still in the shadows of its bigger brother “soccer” and is not popular enough to survive or compete with other nations without the help of big sponsors like DKB or Toyota.

A shoe in the course of time

Nevertheless, this doesn´t discourage the sport industry to come up with brand new products. Since I am always in contact with those articles I had the chance to notice some things: Let´s take shoes as an example. Their colors keep getting glarier, the design more futuristic than ever before and guess what? The shoe that looks closest to a spaceship always wins!

But unfortunately their quality wouldn´t help its wearers to reach the moon.  50 % plastic and poorly processed seams are not uncommon. But a shoe under a price level of 120 is. But what is the justification for such a high price? Obviously not the Quality aspect…

Brad Tuttle, journalist of business and personal finance for TIME puts it:

“Remember that more expensive does not always mean better. Take bamboo for example: it is cheaper than other exotic woods, but it is resistant to wear and very stylish.”

Read more: http://business.time.com/2012/11/14/does-a-low-price-mean-good-value-or-bad-quality/#ixzz2Iq1izUWP

adidas-spezial-so492292-2-0133554806_neu-adidas-stabil-on-fire-handballschuhe-indoor- Here is an example of the “slightly” development of the same handballshoe model. I received a lot of customer complaints due to breaking plastic pieces in the front part of the spacy pair.

A little side note: My coach and my dad are still wearing the upper, blue shoe

The designs are changing but what about the production conditions?

Regaining Quality through transparency?

It is an open secret that cheap clothing chains like H&M or KiK employ adults and children in emerging countries for starvation wages in low quality mass fabrication. But the emphasize lies on cheap stores where you do not really expect high quality. And you can always check the red list which offers all brands that should be avoided.

But isn´t it even worse selling at a high price level and producing in a low-cost manner?

A research of the belgian consumer organization, Verbruikersunie, criticizes the blurry access to information about the prooduction processes and supply chains of the big firms like Adidas and Nike. The missing transparency makes it hard to evaluate their performance.

If one believes the social and sustainability report of Adidas you can read their promise to fabricate under fair and environmentally-friendly aspects. But reading further in this 54 page long report is worth it because it provides a list with their producing plants and their problems like wages far beyond the wage floor. But on the other hand, Adidas is positively mentioned on the German webpage aktiv-gegen-kinderarbeit.de for its initiative for security in the factories.

Market leader Nike is exposed to even more accusations regarding child labor  than Adidas. If you imagine a typical Nike employee, you expect a hip and trendy youngster but not an 8-year old, right? According to child-awareness.com, “Nike is one of the well-known major corporations and is worth four billion dollars. They have factories in China, South Korea, Indonesia, Thailand and Vietnam, where they employ people, including children for twelve-hour shifts and pay them as low sixteen cents an hour.” The newest revolts of workers in Indonesia were recognized by Nike`s global corporate communications director, Greg Rossiter and brushed aside with the promise:

“Nike takes these claims seriously and company representatives are investigating the claims,”

4437_86f1_525The “Just don´t do it”- campaign from UNICEF also clearly defines its opinion about Nike.

Nike vindicates those accusations with another statement on their website:

“Our greatest responsibility as a global company is to play a role in bringing about positive, systemic change for workers within our supply chain and in the industry. We’re looking end-to-end, from the first phase of our product creation process to the impacts of our decisions on the lives of workers in the factories that bring our product to life.”

Those are just examples of accusations against the sports industry. It just makes me sad when I compare the smiling and sparkling kids` eyes when they hold their brand new adipower stabil shoe from their idol in their hand with those wide-opened eyes of a starving kid who just stitched it. Is that the deal? One kid has to suffer for the other one´s happiness?

I already made my decision. As long as there is no clear transparency of those mass product firms like Adidas or Nike I will try to stick with handball brands like Hummel or Kempa, which are both well-known for their fair Business even if my shoes are no spaceships then.

Advertisements

Ho Ho Ho, Merry Purchase

christmas-coffee-cute-drink-food-Favim.com-127500_large

Holliday seasons have always been a great motivation to spend a bit more than we usually tend to: for family, friends and most importantly, some would say, for ourselves. As if we actually needed extra motivation to fill in our holiday carts, companies like Tasimo makes extra efforts to remind us, with a fresh and Christmassy new commercial presenting their new coffee machine.
The the5marketeers, a strategic brand management blog for coffee lovers,reports that as a response to Tasmio, Philips and Nescaffe offers cashbacks up to €100 on purchasing the Senseo or the Lattisima machines.

visual

On the other side of the coffee retail map, stands Starbucks and Nespresso which surprise with their brand new Christmas coffee flavors. Starbucks with the Geisha, a hard-to-grow premium bean, for no less than $7 per cup and $40 for half a pound bag. The Time reports, that this decision is the next step in Starbuck’s marketing strategy – convincing the costumer that a cup of coffee, which used to be sold for less than $1 is actually worth much more.

Moreover, they report this strategy is not just unique to Starbucks, but rather a process in the fast food industry today, offering

premium products to compete with the casual restaurants. Jack Russo, an expert in the industry, claims these premium product are aimed to a specific cut of the population, rather than, who has no problems to spend more money on high quality products. This previous post elaborates more about trends of premium product. If you belong to the group of people who believe this is an outrageous move of Starbucks, perhaps you should watch Jimmy Kimmel, host of ABC’s Jimmy Kimmel Live, more often: “Although while it’s ridiculous to spend $7 on a cup of coffee, it’s not that much more ridiculous than spending $4 on a cup of coffee.”

In order to keep with the competition, the5marketeers posted Nespresso pulled out of their sleeves 3 new tastes especially for the Christmas holidays: Coconut, Hazelnut and Macadamia Nut. Hazelnut, which can also be tried in one of the Nespresso boutique stores around your area.

noel-8
As Starbucks wished us recently: The holiday drinks are here, so have fun!

“That awkward moment when you realize an energy drink has a better space programme than your nation”

Exactly one week ago Sebastian Vettel won his 3rd Formula 1 world championship title in Sao Paulo. After one of the most exiting races in history he reached the finish line as the 6th car and ruined Fernando Alonso dream of still winning the championship somehow. But instead of being enthusiastic of Vettels three titles in a row some competitors only treat Vettel with respect. But why? The answer is pretty simple and equal to many other situations in life: Money. Vettels team RED BULL has the highest seasonal budget and therefore the best team and technology.

This is just another great picture that illustrates the marking of the Energy Drink seller Red Bull. A company that has nothing to do with racing wins the most important Formula in the world. Another example is Red Bulls latest coup that caught the words attention: Felix Baumgartner’s Space Jump. A guy jumps from the edge of the world for scientific reasons and an Energy Drink seller sponsored all of that. A tweet described it as “That awkward moment when you realize an energy drink has a better space programme than your nation.”

Vettel Gangnam Style

Vettel Gangnam Style

An Air Race without Red Bull signs? Impossible.

But what can we learn from Red Bulls obviously great Stratos-Project- Marketing? For Nicola Kemp, a professional blogger on marketingmagazine.co.uk, the first lesson is the final purpose: “Red Bull Stratos has not only underlined the brand’s authentic link to extreme sport and innovation, it has also provided its employees with a motivation bigger than selling sugar water (or energy drinks for that matter) for the rest of their lives.” People built connections between extreme sport and Red Bull in their heads. An Air Race without Red Bull signs? Impossible.

Her second derivation from the Stratos Project is that companies should not only look on their own advantages but even more on societies fortune. The projects purpose was, besides the marketing factor, to deliver important data for scientists and NASA. People like that and it makes a company look trustworthy.

Felix' Baumgartners Space Jump

Felix’ Baumgartners Space Jump

“The message is clear: to be truly great, brands must transcend ROI”

Point Number three: Take a stab back. Nicola Kemp beliefs that the Energy Drink producer didn’t want the event to look like a marketing event: “In fact, Red Bull itself has blocked agencies involved in the project from talking to the press because it doesn’t want the event to be viewed as a marketing stunt.” James Kirkham, managing partner at Holler, insisted that for some people the event created something like an “I was there moment”. This is great for the company and without being totally presented as the initiator of everything people built a likeable connection to Red Bull. For Nicola Kemp: ”The message is clear: to be truly great, brands must transcend ROI”.

Overall we can conclude that Red Bull taught the world another great marketing lesson. The Red Bull Stratos project pushed marketing innovation forward into another dimension. From today on, marketing is not only supporting aids research and social projects; it’s also delivering space jump data to the NASA.

 

How To Make Money?

Logo_NespressoNestlé, currently the largest food company in the world, is located in Vevey, Switzerland. Nestlé produces baby food, bottled water, breakfast cereal,
ice-cream, dairy products and of course – coffee.

In order to understand how to make money from selling coffee, a wise way to start would be by taking a quick view into the daughter company of Nestlé, a $3 billion revenue creator per year, with a current record of 10 million customers – Nespresso.

Nespresso offers the consumer the experience of making fresh home-made espresso without the need to leave for Café. Perfect for any sort of house gathering or just to satisfy the desire for an immediate high quality cup of coffee.  The secret of Nespresso is the machine as well as its special capsules, which are both officially patented, causing limited competition so far.

Marketing, Marketing, Marketing

Is a high quality machine and special patented capsules enough to be a money making success? FastCompany reports that Nespresso started creating additional value to their brand name, increasing their prestige and reputation by serving their coffee to first-class airline passengers only.
Already by 2000 Nespresso coffee was served in 1100 planes, in 20 different airline companies, exposing 3.5 million travelers a year to the brand.

More than that, celebrities George Cloony and Penelope Cruz were selected specifically to represent Nespresso in prime-time TV commercials. Franz Niedermair, VP-Marketing at Nespresso USA, claims that Cloony and Cruz give the viewers a feeling of European heritage, elegancy and sophistication, all which the American consumer is craving for when drinking his cup of coffee.

Coffee marketing blog the5marketeers, reports Nespresso’s business strategy is to represent life style – a quality product costumers will pay more for. Nespresso uses a unique targeted marketing which allows gathering specific information about the consumer – his age, frequency of his purchases, habits – all which is recorded for future projects. Moreover, One to One marketing strategy is used in the Nespresso stores – individual care for each and every client: referring to the costumer by his family name and not as part of the mass market; the customer is part of the “Nespresso Club” – giving the card owner a dedicated lounge space in the Nespresso stores. There he has the possibilities to try out new tastes, new smartphone applications, access to a quality hotline and much more.

2012-11-29_1722

Should We Invest?

Perhaps the most important question of them all. With a growth percentage of 20% a year and billions of dollars of revenues, the answer seems to be a definite yes. However, BuildingStrongBrands reports Starbucks, a stronger brand name than Nespresso in today’s  market, is about to launch in the next couple of months its own home-used coffee machine which will most likely decrease Nespresso’s revenues. Another thing to keep in mind is, that at the end of 2012 the capsule patent of Nespresso will expire, opening
competition between new and already existing companies to duplicate
the success of Nespresso.

STARBUCKS_430x242