Marketing Strategy: How Apple, Nike, Mountain Dew Connect with Customers

"C-level life"--complete consumer control--has arrived. Consumers now have unprecedented access to excess-entertainment, infotainment, utilitainment and everything in between. It has put chief marketing officers and their marketing minions in the hot seat. As companies hold them more accountable for every dollar spent, they are questioning the efficacy of established tools of their trade. Clearly, marketers that have embraced the latest, buzz-name-worthy phenomena, such as mocioeconomics, VOD, blogging, bluecasting, podcasting, social networking and branded entertainment, should be applauded. Armed with more-precise tracking and measurement capabilities, many believe that these new content-distribution models and contextual media platforms are quite possibly the "big ideas" that will keep consumers coming back for more. But are marketers placing too much emphasis on the value of access? Ironically, brands that assert themselves across too many distribution platforms risk becoming intrusive or merely background noise. Moreover, they become "vogue marketers," intermittently dipping their toes into culture and technology inflection points that other brands have identified and nurtured from the beginning. A few notable brands have remained relevant and coveted, largely because throughout their history, they have embraced one communal inspiration-music or sports, for example. By entrenching themselves over the long term within communities of people with shared values, they have earned the emotional currency to speak honestly with their target market. Apple, Mountain Dew and Nike are examples of brands that have effectively connected with their target market via a communal inspiration. Their celebrity as innovative marketers evolved by "living the big idea." In this new C-level world, it is critical that brands be facilitators of what matters most to target consumers. Studying the genesis of their brand DNA-who they are and how they got here-enables marketers to better understand how to establish and nurture their own consumer connections by leveraging a single communal inspiration. Apple Computer Music is an extremely powerful communal inspiration. No other brand in the world has done more to facilitate the creation, distribution and consumption of music than Apple Computer. And no other communal inspiration has done more for a company than music has done for Apple. I joined Apple's Interactive Music Business Development Group as a consultant in 1996. The music group was part of Apple's New Media & Entertainment Division (NMED) that launched in 1992, led by Satjiv Cahill, who today is the senior VP-marketing for the Personal Systems Group at Hewlett-Packard. Mr. Cahill and his team believed that music, movies and sports drove consumer trends. They focused on partnering with existing customers from the creative communities to foster new content and distribution platforms such as Webcasting, audio/video downloads/streaming and enhanced CDs that could ultimately drive their business. Music continued to be a huge focal point. Partnerships with recording artists such as Peter Gabriel, Metallica and Janet Jackson, concert Webcasts and the first Webcast of the Grammys demonstrated Apple's commitment to music. "Apple was the company likely to emerge the victor in the collision of media and technology, especially in music, since the Macintosh has been the tool of choice for the creators of the media," says David Pakman, former music group director and now CEO of independent music seller EMusic. With their feet firmly planted in the music space, Apple introduced the iPod and iTunes in October 2001. There were 2 million downloads in only 16 days, all of which were purchased through Macintosh computers. Apple was about to revolutionize the music industry, and the iPod was the catalyst for an enormous new revenue stream and subsequently propelled all other product lines. And Apple was going to transform itself through the one communal inspiration it valued most. Today, Apple boasts more than 50 million iPods sold (75% market share) and more than 1 billion iTunes songs sold (87% market share). Mountain Dew In June 1994, I introduced the idea of producing an edgy soundtrack compilation for ESPN's inaugural action-sports competition, the Extreme Games, to my A&R colleagues at Atlantic Records. Many CMOs of potential sponsors dismissed ESPN's programming experiment as far too niche. Still, Pepsi's Mountain Dew stepped forward as the first of seven brands to sign on as foundational sponsors for the debut, broadcast on June 24, 1995. To Mountain Dew, aimed at young, adventurous, outdoor types since 1972, it appeared a perfect fit. One year later, the event was renamed X Games. Around the same time, the brand began to dedicate promotional resources to building a deeper connection with the action-sports community. Over the next few years, Mountain Dew was viewed as a cultural ambassador of the action-sports craze. In five years, action sports accelerated from niche to mass, and a host of new, deep-pocket brands dove into the entire category. "Since Dew had been entrenched in action sports from the beginning, it seemed like the right time to establish something big that we would own outside of our association with the X Games," says John Galloway, VP-sports and media for Pepsi-Cola North America. In 2002, Mr. Galloway's team and Mountain Dew's youth marketing agency, Fuse, had been incubating the idea of building a proprietary program that strengthened Mountain Dew's support of action sports on a grassroots level. In June 2002, Mountain Dew launched its own tour, called Dew Free Flow, a series of daytime skate events in 25 markets that brought skateboard jams to local skate parks. At the end of 2004, Dew was first to be approached by Universal's NBC Sports and Clear Channel to sponsor the first season-long professional multi-sport tour in action sports. Mountain Dew suggested integrating Free Flow as part of the action sports tour sponsorship. Named the Dew Action Sports Tour, it made its network debut on NBC on June 11, 2005. NBC and USA Networks committed 32 original hours of exclusive coverage and $2.5 million in prize money. "The Dew Tour is one very important spoke in what Dew does to interact with athletes and [define] who we are as a brand," Mr. Galloway says. Mountain Dew continues to be synonymous with action-sports culture. Nike Although Nike had significant emotional equity in the sport, the brand wanted to create a general buzz within the basketball community. In 2002, Nike hosted a series of invitation-only streetball tournaments called Nike Battlegrounds, filmed on the blacktops of New York and Los Angeles. Inspired by the content they captured on film, Nike, its ad agency, Wieden & Kennedy, and a producer of TV advertising and branded content, Radical Media, pitched Battlegrounds as a series to MTV in 2002. MTV got on board immediately. A line of Battlegrounds shoes was already at retail six months earlier, but the Nike Battlegrounds TV series was designed to dramatically bring to life Nike's take on summertime basketball and promote Cleveland Cavs' LeBron James, signed in 2003. "As with our products, we strive to make our marketing efforts authentic, credible and innovative," says Alistair Campbell, Nike's content manager. In 2003, Nike Battlegrounds' "Ball or Fall" launched, followed by "King of the World" in 2004, broadcast on MTV and MTV2. The series featured top streetballers from various U.S. cities. Nike Battlegrounds was an immediate hit with MTV audiences and drew a huge buzz across the Web universe. For season three, "King of the Court," in 2005, Radical Media CEO John Kamen and Executive Producer-Head of Content Justin Wilkes felt they had to skew the show younger, to keep it fresh and more engaging. When Nike invited Mr. James to do a cameo in the show, they quickly redeveloped the story as an open-call tryout for kids in New York and Chicago to represent their cities in a five-on-five streetball duel. Mr. James then offered to host the finale in his hometown of Akron, Ohio. Nike ran minimal print and radio in key urban markets and never ran Battlegrounds shoe spots during the show. "Battlegrounds was a natural extension of what they have always done well, telling a great story," Mr. Wilkes says. "Nike understands the value of being authentic," Mr. Kamen says. MTV and MTV2 have aired King of the World almost 100 times, in 10 countries including the U.S., and King of the Court more than 60 times in the U.S. thus far. Since 2002, several hundred thousand pairs of Battlegrounds shoes have been sold, which Nike largely attributes to the TV series. About the authors: Steve Yanovsky, principal of BrandAlchemy, is a lifestyle-marketing and convergence media consultant and co-founder of new automotive VOD channel and utilitainment platform DriverTV. Ruth Simmons is managing director of Songseekers, a U.K.-based music consultancy. She is a creative resource for global brands in music licensing and music-related marketing.

Marketing Strategy: How Apple, Nike, Mountain Dew Connect with Customers

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