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Reebok International Ltd.
Group F09927813 BANE AVDHOOT ARVIND 09927851 SUDHANSHU SHEKHAR 09927880 SANJOE TOM JOSE 09927911 SANDEEP SINGH BHATIA 09927841 MANVENDRA GUPTA09927888 ARUN KUMAR SINGARAJ 09427704 PRABHAT PANI( PHD )
History 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.
Reebok Net Sales
1983 1984 1985 1986 19870
200
400
600
800
1000
1200
Net Sales
Net Sales
Diversification At the same time, company began
diversifying into other products Aerobic shoes dropped in share of total
shoes produced from 56% to 29%
Market Share
Reebok; 32.20%
Nike; 18.60%
Adidas; 5.70%Aviva; 2.30%
Asics Tiger; 2.20%
Others; 30.90%
Converse; 8.10%
Reebok’s Success 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 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)
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) 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
Strengths Access to retailers through its direct
distribution strategy– Add value by traveling 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
Weakness› Could not sustain its image as an
aspirational brand.
› Entire market study is primarily targetted in the US.
Consumer Buying Pattern
Information Source
Total Users Non Users
Friend or relative
72% 69% 74%
Coach or instructor
65 64 65
Salesperson 54 53 54Article in magazine
50 52 48
Advertisement 45 43 47
Reebok
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
Serious athletes- Smallest segment, perceived by industry analysts to be opinion leaders for both of the other segments
Communications Programs • 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
1988 Business Environment 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
About Human Right Tour A world concert tour conceived by AI Aimed at developing Human Right
Awareness worldwide. Telephonic Survey of 1000 US nationals
ordered by Reebok to identify attitudes towards AI
The Human Rights Now! Tour
Objective is to reach young people with a positive message about Reebok
Nature of the event The most exciting event of the year Mass pre-event, event, and post-event
exposure expected 18 concerts in 16 countries on 5 continents Extensive advertising, promotions, and
public relations planned
Human Rights Now! TourNature of the event As the sole underwriter of the tour, the
risks are high $2M tour expenses + up to $8M tour deficit
+ $5M marketing = up to $15M / 1 Potential negative tour publicity
– AI has the final decision on most aspects of the tour– Net profits from tour merchandise donated to AI
Human Rights Now! TourNature of the event Reebok created a human rights department,
thought to be the first among CSR initiative in the private sector
Nike sales surpassed Reebok- need to do some thing different
Marketing communication is not about whether to communicate , its about what, when and how to say it and to whom and how often
President Jimmy Carter joins the Reebok Human Rights Board of Advisors
Benefits of Sponsorship Target Group for Reebok is geography
independent and same true of the event. Demographically and psychographically events covers the entire target group
Event offers sustained exposure to the brand as a social movement will remain in the minds of people who are a part of it for a long time
Will reinforce perceptions of key brand image association with freedom & youth
Enhance Corporate image as likeable company promoting social causes
Benefits of Sponsorship Huge number of people going to be
part of the event in different geographies in a very lively environment (music concert). The experiences created in an environment of youthfulness and dynamism will stay with them forever.
Opportunity to entertain key clients-Youth Association leaders etc
Merchandising opportunities
Measuring Sponsorship Benefits
Direct tracking of sponsorship related activities: web data, call center data, online event statistics
Quantitative Research: analytics to link sponsorship to brand awareness, sales & retention
Qualitative analysis: on-site/in market, pre/post, participant/non-participant