sebnemuz
Marketing Sneakers The High End Sneaker Business Is Booming (3:41)…
Marketing Sneakers
The High End Sneaker Business Is Booming (3:41)
“Zion Williamson is about to get paid,” read the headline in an article on April 1, 2019, on the ESPN website. Zion Williamson averaged 22.6 points, 8.9 rebounds, 2.1 assists, and made 68 percent of his field goals in his one year of American college basketball, playing for coach Mike Krzyzewski at Duke University during the 2018-2019 season.
Williamson is 6’7″ and 285 pounds (2.01 meters and 129 kg), had the best player efficiency rating
(PER) in college basketball in at least a decade (42.55), and was the top pick in the NBA draft in 2019. Before even being drafted to play in the National Basketball Association’s league, it was well-known that, behind-the-scenes, Williamson had received several $100 million offers to sign a sneaker contract with Adidas, Anta, New Balance, Nike, Puma, or Under Armor.
And who can blame these companies for going after what is perhaps the best player to be drafted into
the NBA since Shaquille O’Neal went to the Orlando Magic out of Louisiana State University in 1992 or since Kobe Bryant made the leap from Lower Merion High School in 1996 to the Los Angeles Lakers. Williamson is expected to have a once-in-ageneration NBA career. Because he entered the NBA at 18 years of age (his season started October 2019) and will likely play until his mid-30s, NBA and sneaker-company executives are drooling over the sales prospects. At the same time, Michael Jordanarguably the best basketball player ever retired from the NBA in 2003 and yet is still helping Nike sell some $3 billion in sneakers annually. The Jordan brand, a subsidiary of Nike since 1997, has been a Nike property since 1984 (when Jordan left the University of North Carolina after three seasons to play NBA basketball).
It is clear that the sneaker competition is fierce in the international marketplace. The Zion Williamson
and Michael Jordan storiesalbeit incredibleare only part of the global landscape of athlete-driven
sales. In tennis, Roger Federer, Serena Williams, and Novak Djokovic, to mention only a few players,
make millions in endorsements. So do Cristiano Ronaldo, Lionel Messi, and Neymar in the global sport of football (soccer), as well as Tiger Woods and Phil Michelson, among many others, in golf.
There are many more examples, say, with Usain Bolt in track, or even Mahendra Singh Dhoni in cricketalthough not having a widespread fanbase in the United States (unlike NBA basketball),
cricket is still an international game, and Mahendra Singh Dhoni is the highest-paid batsman in the
sport and a social media juggernaut, serving as brand ambassador for PepsiCo, for example.
In this unique international marketplace populated by sports superstars, it is fascinating to see companies like Adidas, Anta, New Balance, Nike, Puma, and Under Armor compete for players, particularly when it comes to the sneaker sector of the industry. It clearly goes way beyond Zion Williamson, Michael Jordan, and the NBA. And given that the world of sports and the different types of sneakers used are so different around the world and are dependent on which sport is being played or followed, these companies have strategic decisions to make each year regarding every sport they engage in worldwidesuch as which superstars to use for their brands, how many, and in what way.
Mahendra Singh Dhoni’s name and image do not sell many shoes in the United States, but they clearly do in the cricket-playing world. When it comes to Michael Jordan, he helps sell shoes everywhere, and that is the hope regarding Zion Williamson. Football (or soccer, as it’s known in the United States) is the world’s largest sport, with 4 billion fans. But can a soccer mega-star like Cristiano Ronaldo or Lionel Messi carry a brand as successfully as Michael Jordan? Serena Williams clearly helps sell sports items in the United States, but what about Novak Djokovic? Roger Federer may be the most famous tennis player in recent memory, and is quite a valuable commodity, but how do international tennis stars like Caroline Wozniacki (Denmark) and Maria Sharapova (Russia) stack up next to him when it comes to selling power? They may not have his star wattage, but they too have won Grand Slam tournaments.
Multinational corporations use a mix of marketing research and business analytics to evaluate the potential impact of players like Zion Williamson. Research has shown that there is a positive payoff on signing athletic stars to endorsement deals to brand a company’s products. The right endorsement increases sales in general, as well as relative to a product’s competitors. If the athlete then also achieves success, in addition to that athlete’s fame, the brand benefits immediately. However, returns will diminish over time if the athlete’s success lessens. Very few athletes transcend the success of their time in the sport. Michael Jordan is clearly one such basketball player, as is Shaquille O’Neal, but on a more limited scale. Other retired athletes, such as Jack Nicklaus (golf), David Beckham (football/soccer), and Wayne Gretzky (hockey), carry brands as well. Can Zion Williamson follow in their footsteps while active, and once retired?
Sources: John Gotty, “Where Does Jordan Brand Go in 2019?” Complex, January 10, 2019; Megan Armstrong, “Michael Jordan, LeBron James and 10 of the Biggest Sports Endorsement Deals,” MSN Sports, February 15, 2017; “The Highest-Paid Retired Athletes,” Forbes, April 15, 2019; Joe Boozzell, “Is Zion Williamson Having the Best Individual College Basketball Season of the Last 20
Years?” NCAA, January 21, 2019.
Case Discussion Questions
Why do superstar athletes have so much brand selling power?
Why does the selling power of athletic superstars often transcend sports equipment and apparel?
What major sports have the greatest global appeal? Which major sports are more local in appeal? How does this influence a company’s choice of brand ambassador?
What explains Michael Jordan’s longevity as a brand ambassador for Nike?
Do you think that a superstar such as soccer player Lionel Messi would be a good brand ambassador in the United States
