Thursday, October 31, 2013

Under Armour Offers 25,000 Reasons to be Interested in 39

Like any great marketer, Under Armour seeks to improve the quality and performance of its products. The company is turning to the wisdom of the crowd to seek ideas for enhancing the Armour39, a performance monitoring device and iPhone app. The product is available as a strap (pictured) for $149.99 or as a watch for $199.99. Armour39 collects data such as heart rate, calories burned, and workout intensity. Data can be transferred to the app to compile and store workout stats for up to 120 days. Technology enables athletes to elevate their training efforts without requiring expensive, highly specialized training equipment.

Innovation through Crowdsourcing
Under Armour is using a popular practice to develop innovations for Armour39: Crowdsourcing. Many firms use crowdsourcing to solicit ideas from enterprising people who lack an outlet for flexing their creative muscle. Crowdsourcing initiatives typically offer financial incentives to attract interest and bring out the best ideas from the crowd. Armour39 is no different; Under Armour is offering a grand prize of $25,000 and a runner-up prize of $10,000 for the Armour39 Challenge. The competition will be executed in three phases:
  1. Capabilities - Entrants will submit a summary of their idea along with a 3-5 minute video in which they talk about their qualifications to come up with an innovation plus an explanation of how their idea would work. Under Armour will select 50 entrants to move to Phase 2. Phase 1 began October 14 and ends November 15.
  2. Prototype - The 50 winners in Phase 1 will receive a developer's kit that includes the Armour39 strap and software. They will have approximately three and one-half months (December 13-March 1) to develop a prototype of their innovation.
  3. Prize - The final phase is a competition among the 15 semi-finalists will be invited to demonstrate their innovation to a team of Under Armour executives at the Digital Future Show Event at Under Armour in early April. 
On the website, contest guidelines suggest innovations that the company is seeking such as competitive analysis of workout performance that compares different users, algorithms that identify the exercise a user is performing, and heart rate profile and assessment. In general, Under Armour is open to any ideas that will improve the functionality of the product.

Why Crowdsource?
The crowdsourcing approach is interesting in that Under Armour has been a wildly successful company without having tapped the wisdom of the crowd. So, why would the company start now? To understand why a company like Under Armour would use crowdsourcing, here are three considerations:

  1. Great ideas do not reside exclusively within the walls of an organization. As much as Under Armour or any other company would like to believe it has the brightest and most creative employees around, reality is that many smart people with viable ideas are unknown. Crowdsourcing encourages "closet innovators" to enter the limelight.
  2. It fits an innovation culture. Under Armour built its brand on offering a different kind of product. Encouraging innovation by going outside the organization is not an admission of weakness. Instead, it is a sign of strength as company executives are essentially recruiting globally to bring the best ideas to Under Armour.
  3. Crowdsourcing can enhance brand building efforts.The Armour39 Challenge has brought exposure to Under Armour for being innovative. People may see the crowdsourcing initiative as evidence that Under Armour is a highly innovative company, positively shaping perceptions that comprise brand image.
Time will tell how the Armour39 Challenge affects the evolution of the Armour39 product. But, rather than the product development process being cloaked in secrecy, Under Armour is building excitement for future iterations of the product by calling on developers everywhere to submit ideas for adding new value to Armour39. 

Wednesday, October 23, 2013

Keurig Brews Sponsorship to Reach Next Generation of Customers

Textbook sponsorship strategy entails selecting and activating a sport property sponsorship in pursuit of business objectives. After all, a sponsorship should do something, whether it is increase brand awareness, shape brand image, attract new customers, or grow sales. This given is often overlooked as companies enter into sponsorships without clearly stated expectations or objectives. If you want a glimpse of how sponsorship should mesh with business strategy, look to Keurig's new college sports sponsorship initiative. The maker of coffee machines and owner of Green Mountain Coffee Roasters signed a deal with IMG College to have a presence on 25 campuses across prominent conferences including Florida, Georgia, Pittsburgh, and Texas.

Clear Objectives
What is most notable about Keurig's deal with IMG College is its intentions to use the partnership to achieve crucial marketing objectives. In a recent Sports Business Daily article, Green Mountain senior vice president of marketing Dwight Brown touts the deal as a way to reach the next generation of coffee drinkers. Moreover, Keurig has a need to influence a particular behavior, brewing and drinking one cup of coffee at a time versus brewing a pot of coffee. Another strategic consideration is that Keurig is interested in expanding its market presence in Texas and California, relying on sponsorship of Texas and UCLA, respectively, to support that objective. Finally, Keurig has rights to make officially licensed coffee makers for 11 schools, providing another platform for selling machines to fans who wish to own a coffee maker branded with their favorite college sports team.

Now What?
What is not discussed in the SBD article is most intriguing about the Keurig-IMG College partnership: How Keurig will activate its new asset. The possibilities seem limitless for Keurig to create campaigns around the college sponsorship program. Can you see the following in the coming months:
  • Keurig or Green Mountain branded experiences at sporting events
  • Cause marketing promotions with partner institutions
  • Social media contests
  • In-game promotions
and much more. Keurig seems to have a great deal of creative leeway in developing activation programs to maximize the association with their collegiate partners. What would you recommend Keurig do to market its college sponsorship?

Tuesday, October 15, 2013

Arizona Wildcats Bring Fans into the Gameday Experience

Marketing has evolved from being about selling products to delivering services, and more recently, creating experiences. The shift toward experiential marketing is more about fulfilling customers desires and less about using gimmickry to "wow" them. Experiential marketing can be defined as the creation of a multi-sensory, interactive environment by a sports property or sponsor designed to add value to a consumer’s experience in the short-term and strengthen relationships in the long- term. This definition implies there is strategy behind experiential marketing... at least there should be.

Experiential Marketing Strategies
In Chapter 7 of Sports Marketing, four strategies are identified for connecting experiential marketing with desired business outcomes:
  1. Achieve brand differentiation - Immersion in an experience can change people's perceptions about a brand relative to competition.
  2. Provide benefits through exclusivity - One of the greatest assets a sports property has is access to its events, players, coaches, and facilities. How can access be used to create experiences that give  customers unique benefits?
  3. Offer rewards to key customers - Let's face it, not all customers are equal in terms of their financial value and loyalty. Offering unique experiences to your most important customers is a way to reward their commitment and strengthen relationship bonds with them.
  4. Motivate product evaluation and trial - The opportunity for people to participate in an experience can serve as a "nudge" to try or adopt a product.
Different strategies can be developed to market to customers or prospects at different relationship states with a brand.Offering rewards to key customers and motivate product trial are strategies aimed at two very different customer segments. The former is an audience that is already your customer... and a valuable one at that. The latter targets people who may have never bought from you or have less familiarity with your product. In other words, experiential marketing can be a platform that includes different experiences tailored to meet people at their present relationship state with your brand.

Experiential Marketing - University of Arizona Football
A current example of how experiential marketing can be used to meet a sport property's marketing challenges is being implemented by the University of Arizona. A combination of off dates and away games meant that Arizona had a span of 35 days between home football games. To build and maintain interest for the remainder of the season, Arizona athletics director Greg Byrne announced experiential initiatives that put a few chosen fans in the middle of the action:
  • Beginning with this week's game against Utah, a ticket holder will be selected to announce Arizona's uniform combination for the upcoming game on his or her own Twitter feed. Byrne and the Arizona athletics Twitter feed will "retweet" the fan's announcement.
  • On the morning of a home game, a fan in attendance will be chosen to accompany head football coach Rich Rodriguez and the team on the "Wildcat Walk" to the stadium.
  • A fan in attendance at least one hour before game time will be chosen to run out on the field with the Arizona team.
  • A fan at the game will be chosen by Byrne to accompany him to Coach Rodriguez's post-game press conference.
A cynical view of these experiential tactics might be that they are nothing more than gimmicks. A comment on a media story about the Arizona experiential initiatives suggested that a better way to engage fans would be to put a better product on the field (that is a topic we will let other bloggers handle).

Two characteristics stand out regarding Arizona's experiential marketing plans for its football program:
  1. The experiences are not "manufactured" but are occurring already - Announcing uniform combination, the Wildcat Walk, the team running onto the field, and coach's post-game press conference are actual product elements of the total product. Greg Byrne and Arizona athletics are transforming these elements by involving select fans in them.
  2. No additional costs required - When you think of creating memorable experiences for customers or fans it would be assumed that it can be done only with a significant financial investment. To be sure, many experiences created for fans require investment in creating physical spaces, interactive elements, or compensating talent. The Arizona football experiences can be offered with no additional investment.
Market Experiences, not Products
People do not want products, they want what products will do for them. Experiential marketing falls in line with that fundamental customer desire. Experiences can add to perceived quality and enjoyment of sport consumption. Look for opportunities to turn your products into consumption experiences, just as Arizona football has done on a small scale.

Friday, October 11, 2013

Matheny Wins by Putting Others First

Imagine you are new to a job in which you have a leadership role, and you immediately face the following challenges:
  • Your predecessor is widely considered a legend in the industry
  • Your company has just completed a stellar year- is there anywhere else to go but down?
  • Your best employee leaves the organization as you arrive
On top of these challenges, this is the first time you have held a leadership position this high in an organization.

This string of challenges might make for entertaining lyrics to a country music song, but they also are the reality that Mike Matheny faced when he was named manager of the St. Louis Cardinals in late 2011. To recap the environment around him upon being named manager:
  • Matheny replaced Tony LaRussa, a beloved manager who had led the Cardinals to two World Series titles.
  • The Cardinals had just beaten the Texas Rangers to win the 2011 World Series. No team has repeated as champions since the New York Yankees won three titles in row between 1998 and 2000. 
  • Cardinals slugger Albert Pujols, also a beloved figure in St. Louis and the team's best player for a decade, left for the Los Angeles Angels.
The stage was set for Mike Matheny to fail, so it seemed. But, the team the Cardinals are in the National League Championship Series for the second straight year with Matheny at the helm. 

A Servant Leader
Mike Matheny makes clear the reason he has enjoyed success as a Major League manager: The practice of servant leadership. After his playing days as a catcher, Matheny learned about a practice known as servant leadership. Rather than leading by exerting authority, a servant leader puts other people's interests ahead of his or her own. Matheny's style is to build rapport with players from top stars down to minor leaguers vying for a spot on the Cardinals roster. He instills confidence in young players and reassures players that are struggling to play to their potential. Matheny advocates servant leadership because it "makes other people better. When you make other people better, and you set your mind on how to focus on someone outside yourself, you create something pretty special."

Can You Win by Being Last?
On the surface, servant leadership seems to go against most of the advice given to advance one's career- "look out for number one" and "build your personal brand" suggest a focus on ourselves, not others. Notice what servant leadership is not- it is not about letting others use you and your talents at your expense. Instead, servant leadership advances the interests of a group, team, or organization by empowering individuals. You win when the group wins. There is no doubt who is in charge of the St. Louis Cardinals. Mike Matheny has created a culture not based on traditional top-down managing but rather a mindset that individual players are valued contributors to the team's success. Matheny has proven that you can be first (literally) by putting the interests and needs of others ahead of your own. - Matheny's selfless approach a perfect fit for Cardinals

Monday, October 7, 2013

A Kick-Butt Innovation for Sport Consumption?

Technology enhancements have made the experience of viewing sporting events at home a viable substitute for attending in person without the traffic, long lines, and unruly spectators. In fact, the viewing experience has become of such high quality that it may actually threaten revenue streams associated with live events such as ticket sales and foodservice. An innovation by the Guitammer Company has the potential to further shake up the in-home viewing experience... literally.

A Kick in the Butt for Sport Properties
Guitammer's ButtKicker line of products has brought a new dimension to consumption in movie theaters, home theaters, and video gaming. Now, ButtKicker is poised to change the sporting event viewing experience by making possible "4D" broadcasts. Its first venture is a partnership with the National Hot Rod Association and its media partner, ESPN. The ButtKicker's 4D sports product is a device that when attached at the base of sofa acts like a "silent subwoofer." Sensations of roaring cars that fans experience at NHRA races are replicated through the ButtKicker device. The product is touted for having simple set up, but the $299.99 price may slow the adoption rate of the 4D sport consumption experience.Price aside, introduction of the ButtKicker for sports is a call to sports marketers and businesses that are suppliers to the sports industry to explore how to blend technology with underserved customer needs to guide new product development.

Innovation versus Novelty
For the ButtKicker or any new product to succeed, four criteria must be met:
  • Relative advantage - The innovation adds value compared to status quo; ButtKicker certainly meets this criterion by bringing the action into viewers' living rooms.
  • Compatibility - The innovation must be congruent with consumers' desires and behaviors. Technology has become very pervasive in our lives, so incorporating a device that transmits "signals" from a live event to our television is not as radical an idea as it would have been just a few years ago. If ButtKicker was for drag racing only it would likely have dim future prospects. But, if the product can be integrated into a wider variety of sports broadcasts the price point may be easier to justify.
  • Complexity - Although the technology that makes a device like ButtKicker possible might be complex, the fundamental benefit provided can be easily explained and communicated. Complexity is inversely related to an innovation's odds of succeeding in the long run.
  • Trialability - Can the innovation be sampled or used prior to committing to making a purchase? Given the price of the ButtKicker product for sports, this criterion might be the most challenging to overcome. Guitammer can demonstrate to 4D sports viewing experience using an exhibit at sporting events as well as partnering with retailers on in-store demonstrations. 
A straightforward definition of innovation is "adding new value." If the answer to this question is not "yes," then it begs the question why an innovation would be brought to market. Perhaps there is impact as a novelty item, but in the long run customer value, not novelty, will determine if an innovation succeeds.

Tuesday, October 1, 2013

What's in a Name?

Sports teams are branded by their nicknames. While geography is an influence on the brand image of a team, the nickname is leveraged more extensively in brand strategy. Selection of brand colors, logo development, and creation of brand characters such as a mascot are usually representations of a team's nickname. Thus, a team's nickname becomes more than an identifier; it is also a marketing asset that can influence brand liking and attract fans to identify with a team. Great care must be exercised in managing brand reputation given the marketing impact of team nicknames.

A Threat to Brand Value
One of the most sensitive branding issues in sports is use of team nicknames and other branding elements that contain Native American references or imagery. Brands like the Atlanta  Braves, Cleveland Indians, and Washington Redskins have a heritage that predates recent debates about the acceptability of their brand names. The debate has not been limited to professional sports. The NCAA addressed the issue by calling on its members whose teams had nicknames with Native American references to change or be prohibited from competing in NCAA championship events (with exceptions made in cases in which a Native American nickname had historical relevance to the institution).

To this point, the general position taken by professional sports leagues and teams on the issue is "we hear you, but we are not changing." That stance could be threatened as members of Congress have joined in with certain special interest groups calling for elimination of the use of Native American nicknames that contain negative imagery. The Washington Redskins in particular have been the target of calls for change on this issue. Many sportswriters and media outlets have indicated they will no longer refer to the Redskins in their coverage of the Washington NFL team.

A Complicated Issue
Although current attitudes and publicity about the suitability of Native American nicknames in sports suggests the time is right for change, eliminating brands like Redskins is easier said than done. An article written by John Rowady, founder and president of sports marketing agency rEvolution, explains that a name change would be a more complicated matter than it appears. One issue is the cost to implement a team re-branding effort. It is estimated that a complete re-branding of a team like the Washington Redskins could cost $15 million. A second issue is how a re-brand would affect relationships with stakeholders, most notably sponsors and fans. Rowady cites in his article that a survey of Washington Redskins fans found overwhelming support for keeping the current name. Likewise, sponsors partner with a team to associate their brand with the team brand. What if the team brand changes drastically and no longer has appeal for a sponsor? The point Rowady makes in his article is that the cost to re-brand the Washington Redskins would likely be greater than the costs of new logo development, signage, and marketing campaigns.

What is a Brand?
In Chapter 5 of Sports Marketing, four roles of a brand are described:

  1. Identity
  2. Image
  3. Promise
  4. Relationship
The first two roles of a brand are more obvious and the focal points in the discussion of whether teams like the Washington Redskins should re-brand. However, the latter two roles of a brand should factor into consideration of whether re-branding should occur. A brand makes promises, some explicit and many that are implicit. For a pro sports team brand, implicit promises could include "good community citizen," "caring," and "socially responsible." A team must evaluate its brand against the promises it makes to determine if it is delivering on those promises. Also, brands serve as connectors with customers and other stakeholders to form relationships. If a brand is too controversial or has negative associations it can have the unintended effect of  turning off the very people, groups, or companies with which it wants to have long term relationships.

Should the Washington Redskins, Atlanta Braves, and Cleveland Indians re-brand? Why or why not?