Professional Documents
Culture Documents
Reebok
Reebok
Outline
Background Why has Reebok been successful? Strengths & weaknesses How consumers by footwear Market Segmentation Proposed communications programs Umbrella brand campaign HRN Tour sponsorship
The Beginning
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.
Aggressive Growth
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.
Diversification
At the same time, company began diversifying into other products Aerobic shoes dropped in share of total shoes produced from 56% to 29%
100% 80% 60% 40% 20% 0% 1984 Aerobic Shoes 1987 All Others
Market Share
Competition was intensified by increases in labor rates, leather costs, and a weakened value of the dollar Increasing costs exerted extreme pressure on profit margins Changes in retailer practices to limiting the number of brands and lines (minimize markdowns) Shortening product life cycles for athletic shoes (9 months)
Market Share
25 Others 30.9% Reebok 32.2%
Asics Tiger 2.2% Avia/LA Gear 2.3% Adidas 5.7% C Nike 18.6%
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.
More Strengths
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)
Well equipped to handle future supply shortages (like the ones in 1987) by manufacturing in multiple countries
Psychographic Trends
Pre 1987 Innovative Vivid Adventurous Experimental Special Vibrant New 1987 Comfortable Youthful Energy Fun Diverse Clean Leader A standard Middle class
Market Segments
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
Market Segments
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
Olympics advertising
Associate Reeboks with sports to excite brand dealers
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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 magazines
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Program Evaluations
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
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Program Evaluations
Overall communications objectives
Boost brand image to be unique and exciting Maintain mass appeal
Program Evaluations
Overall communications objectives
Boost brand image to be unique and exciting Maintain mass appeal
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
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Program Evaluations
Overall communications objectives
Boost brand image to be unique and exciting Maintain mass appeal
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AI has the final decision on most aspects of the tour Net profits from tour merchandise donated to AI
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Questions
Discussion
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