Erich Stamminger
While finishing the second part of our adidas brand asset valuation report, I read this Interbrand interview of Mr Erich Stamminger, the CEO of the adidas brand ( not the adidas group as is used interchangeably. The group is headed by Herbert Hainer ). It was very interesting to read through some of the points he had stated and I excerpt a couple of them here. The whole interview can be read on the Interbrand website.
How is brand building different in today’s age?
Consumers these days are interconnected. Trends that rise today in one area of the world can spread within days, hours, even minutes, into the rest of the world. Before this development started, we had kind of an easy job. Exchange between markets was limited, and a bit slow. So, we were able to build the brand slightly differently in different markets, based on local consumer needs and the distribution landscape. Today, differences in how your brand is perceived and valued by the consumer are fully transparent, which forces brands to build a consistent picture of the brand in consumers’ minds globally, driven by clear values and brand propositions.
How do you go about building a succesful brand?
The first and most critical element is to define values that make the brand stand out and define the guardrails for everything you do and don’t do under the name of your brand. We have a clearly defined brand mission, vision, and values. Authenticity plays a vital role here. It is not only one of our brand values, but it also describes how every activity we do has to fit into that clearly defined frame of mission, vision, and values. It builds trust and credibility with the consumer and provides the basis for identification with your brand, and it must never be jeopardized.
Thought I would share this intuitive graphic shaped around an oval track charting the rise and fall of the three major athletic brands adidas,Puma and Nike. You might have to zoom the image to better see the different chronological descriptions. My take away from it? Fourth grade students are valuable , very valuable 
.
Race to the top
Johan Cruyff
The rivalry between the Dassler brothers which led to the birth of Puma is part of folklore. What is lesser known is the shenanigans and the interesting anecdotes which came along with it. I wanted to share one of my favorite ones, that of Johan Cruff and the Dutch national team kit and this comes from the Guardian out of their famous Q/A knowledge section:
The Dutch FA had a deal with Adidas to supply their kit, and your Johnny Reps and Rob Rensenbrinks of this world were only too happy to wear the stripy orange shirts during the 1974 World Cup in Germany.Cruyff, of course, had other ideas. He had an exclusive personal deal with Adidas’s rivals Puma, who supplied him with their classic Puma King boots. Because of this, he was unwilling to sport the three trademark stripes of Adidas and insisted on a two-striped version instead. As you would expect, he got exactly what he wanted.
Although Cruyff wasn’t around to cause the German kit giants bother when Holland embarked on their 1978 World Cup campaign, his rebellious spirit lived on. The van de Kerkhof twins, Rene and Willy, insisted on being issued with Cruyff-style two-striped shirts else they were off. But did the Dutch FA give in to this blatant show of player power?Of course they did.
Reebok
I stumbled across this interesting snippet which highlights the genesis of Reebok’s Indian success story. Reebok has been a definite trail blazer in India having captured by rough estimates over half of the lucrative Indian market.
The interview is with the Reebok India MD, Subhinder Singh Prem and is dated 2005. I have had the fortune of having personally met him on account of my internship with Reebok India this summer and it was a privelege to have done so.Interning there this summer was a phenomenal experience and deserves a detailed post in its own right. But till then a few excerpts for you:
Here is Mr Singh on the painful lessons learnt:
Our short-sighted approach showed up and showed us up in another initiative. In 2003, based on our finding that most women wear their husbands’ T-shirts and trackpants, or salwar-kameez for walking, we launched a sports salwar-kameez in knit fabric.The focus groups who were shown the product praised it and even suggested changes such as a closed neckline that would do away with the need for a dupatta.But the product bombed. Indian women wanted clothes the rest of the world was wearing — and we hadn’t given hem that. It was perhaps the only product in Reebok India’s range that failed.
On new markets created not entered:
Our learnings were clear: “Ask not what percentage of an existing market your brand can achieve. Ask how large a market your brand can create by putting resources behind creating a category.”
The most efficient, most productive, more useful aspect of branding is creating a new category. Start something totally new. After all, what was the market for home-delivered pizzas before Domino’s began operations? Zero.In 2004, we began to treat our womens’ business initiative as if we were launching a new brand. We started promoting the category by opening women’s-only stores that would meet the special needs of our women customers.
In probably what has been the most enjoyable project I have worked on in my MBA so far, we are trying to value the adidas brand. Within that, we are valuing just the three stripes and not the trefoil logo. Researching for some of the little known things of the brand has thrown up some very interesting nuggets but none more revealing than this.
Karhu
Karhu Sports ( a Finnish sports brand whose logo is seen above ) sold the three stripe trademark to Adidas for (the equivalent of) 1600 euros and two bottles of Whiskey. Yup, the same iconic brand which today is valued at 5.4 billion $ by interbrand. Stunning.
Hopefully, the whisky tasted good for Karhu.
Brand marketers go to great lengths to ensure consumers have the associations they would like them to have. Admittedly, it’s never a perfect art. For some segments you might have to hammer the brand message ad nauseum and for the rest it is analogous to flipping an internal mental switch. You come up with one memorable ad, one memorable tagline and boom! You have them converted for life. I like to think of the former as rational consumers and the latter as the irrational but a fiercely loyal segment – the “fan boys”.
My switch was flipped when I first saw this ad by adidas in the mid nineties. I have tried to introspect and figure out why it had the influence on me which it did. Was it the sight of the smile that slowly spreads across the old woman’s face towards the end – highlighting the sports sans age barriers credo? Was it the fact that we as a nation finally had our sports icon who could complement the new generation? To this day, I still can’t figure out what it was which resonated with me (as a highly impressionable youth at that that time) but fair enough to say it was a powerful pull. It sure would be an interesting exercise to see how brand equity varies with the proportion of rational/irrational adherents the brand might have.
The last time Robbie Keane moved to a club he supported as a kid:
Robbie Keane
Andy Murray
Kevin Mitchell in the Guardian writes an excellent piece as he analyzes the significance of the game tommorow between Federer and Murray. While most have gone overboard harping on the alleged slight by Federer, Kevin eschews hyperbole and goes about it in a balanced view. Some excerpts:
When titles and ATP rankings accumulate, when one plane journey blurs into another, what matters most to the elite players is the respect of their peers. Murray wants that from Federer – and it has not been given unreservedly just yet
What everyone fails to realize is that Fed is feeling the heat as well. While there is prior history between the two, Murray tends to get into Federer’s head a little and that probably explains an extra spurt of snideness from.
There is a vivid sense that, although Federer says he feels less pressure than Murray in this final, that might not be entirely true. This will not be his last slam, far from it; it could, though, be the one that will be remembered as the match in which Murray landed the first proper punch on him.
adidas
It has been permanent jurisdiction in German courts since the 1970s that two, three and four stripe designs infringe adidas’ three stripe trademark. The distinctive mark enjoys a worldwide brand awareness of more than 90 percent. According to the German Federal Court of Justice, the public recalls and recognizes such well-known and distinctive brands rather than un-established marks. It is therefore likely that consumers associate and confuse signs with two, three or four parallel stripes with the adidas trademark.
The objection that the questionable stripe motifs are not used as trademarks, but merely for embellishment or decoration, is negligible. This is because the consumer is accustomed to view parallel stripes on apparel and shoes as evidence of origin and not as a simple design motif.
While this gives adidas a great vantage point, it has had a mild repercussion on the company’s apparel design as evidenced by this:
For more than forty years, the three stripes have appeared on athletes’ dress, while other logos were limited in size to 20 centimeters. This was because the three stripes were considered a design motif and not a logo, like the Nike swoosh or the Puma cougar.
Adidas’ competitors demanded that IOC president Jacques Rogge deprive the three stripes mark of its design status. The IOC deduced from the worldwide trademark registration of the three stripes that they should not be treated as a mere design motif anymore.
Hence, adidas now too is bound by the IOC’s Marketing Code of Conduct, which limits logos to a maximum size of 20 centimeters on an athlete’s shirt.
Fascinating read and answered a lot of the questions I had about why an apparent design concept ( parallel stripes ) was not more widely used or attempted to be used by other brands.
Vive la three stripes.
And as it is the season to list and summarize, BusinessWeek has a list of the 10 most significant events in sports business in 2009. Two of the picks which I personally found interesting are below. I believe it would be a sign of things to come in 2010 as well:
Brooklyn to Add Russian “T” Room
In 2009, the New Jersey Nets became the first NBA team sold to a foreign national owner, Russian oligarch Mikhail Prokhorov, who has signed contracts to acquire, for a reported $200 million, 80% of the franchise and 45% of the Barclays Center in Brooklyn’s Atlantic Yards development. Lady Liberty on nearby Liberty Island couldn’t welcome other foreign national would-be sports owners any better: Give me your tall, your point guards, your huddled masses yearning to break fast. And your billions, be they yuan, euro, or ruble.
The team, which started 2009 with an NBA worst record 0-18, and its new owner will tentatively move into the Barclays Center in 2012. Meantime, the Nets are applauding Atlantic Yards owner Bruce Ratner, who just sold $511 million in bonds to finance Barclays Center construction, negotiating with Newark to play in the Prudential Center for two years, and trying to avoid getting slapped with a technical for on-court incompetence.
The Fury and the Sounders
When asked “What’s My Line,” comedian and game show host Drew Carey now likely answers “successful MLS franchise owner.” The expansion Seattle Sounders Football Club topped Major League Soccer in attendance (the squad drew 430,347 spectators throughout the season) and also leads the league in merchandise sales and overall revenues. The Sounders reached the MLS playoffs in their inaugural season, selling out tickets to their first match in half an hour. Although they didn’t get to the finals, they played host to them, selling out their 67,000 seat stadium for the MLS Cup on Nov. 22. And the team proved a healing salve to Seattle sports fans still reeling over the departure of the NBA SuperSonics for Oklahoma City the year before.
