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POWER 50

Published on .

Reebok, Nike

still racing,

amid changes

Apparel: Corporate shake-ups don't alter competitive stance

By Jeff Jensen

he more things change in the athletic footwear and apparel industry, the more things stay the same.

The past year has seen dramatic shake-ups in the marketing departments at the industry's two titans, Nike and Reebok International.

And yet these upheavals have not appreciably changed the considerable gap that separates the longtime foes. Nike is still on a juggernaut roll, owning a 37% share of the market, while Reebok has stumbled slightly to about 20%, and is now faced with the challenge of regaining share lost to hotter, smaller brands.

Still, No. 2 is still much bigger than No. 3, adidas America, which holds a 6% share of the market.

DECENTRALIZE MARKETING

Last spring, Reebok opted to decentralize its marketing operations, giving each operating unit around the world control over cre-ating their own programs, but with brand strategy being directed from corporate headquarters.

Heading efforts in North America is Pat Hambrick, VP-U.S. marketing. She's overseeing a new brand positioning and ad tagline, "This is my planet," launched in January with an estimated $20 million campaign from Leo Burnett USA, Chicago.

"Our objective this year was to land a line that was closely associated with Reebok," says Ms. Hambrick. "It communicates a message of confidence and control."

It's ironic, then, that having successfully landed a line, Reebok may cut it in 1997. Reebok is pleased with the results, but the company is trying to decide if "This is my planet," a strategy devised by Ms. Hambrick's predecessor Dave Ropes, is the face it wants next year.

"I can't really answer that, because we're just now finalizing ad plans for next year," says Mr. Hambrick.

Ms. Hambrick was the point person on Reebok's 1996 Summer Olympics program, the company's most significant marketing effort of the year. The Reebok vector was prominently featured on more than 3,000 athlete uniforms, and promoted in a $25 million ad campaign and through the company's Web site.

The Olympics was also a key marketing platform for Nike, which flogged its Air cushioning technology in a $35 million ad campaign and an extensive guerrilla-marketing effort in Atlanta. The ad campaign was one of the last helmed by former global ad director Joe McCarthy.

During Mr. McCarthy's tenure, Nike unveiled provocative, edgy creative from Wieden & Kennedy, Portland, Ore., including several spots advocating women's participation in sports.

KEEP MOMENTUM GOING

Maintaining that momentum will be the responsibility of Geoffrey Frost, formerly exec VP-group creative director at FCB/Leber Katz Partners, New York, and now Nike's new global ad director.

For both footwear giants, apparel is becoming a much bigger and more important part of their business. In the past year, Reebok's apparel business grew by 50%; Nike's apparel business doubled. In fact, the Nike swoosh is the hottest thing in sports apparel: the company reported that U.S. apparel sales in its most recent fiscal quarter were up 93% over the same quarter in '95, when it was up 93% over the same quarter in '94.

Nike's swoosh and Reebok's vector have benefited from both companies' partnerships with pro sports leagues. In the past two years, Reebok and Nike have acquired apparel licenses from the National Football League, Major League Baseball, Major League Soccer and a number of colleges. Nike also has an agreement with the National Hockey League, while Reebok has one with the National Basketball Association.

The co-branding and the on-field exposure have served to infuse the swoosh and vector with equity and credibility.

Thus, instead of merely flogging footwear, Nike and Reebok ads more often these days tout the brand, and suggest a head-to-toe look. This fall, both companies launched sizable NFL-themed brand campaigns that served to promote their football footwear and apparel and NFL-licensed products.

The branded look may be a red-hot trend, but the swoosh and the vector should prevail when the winds of fashion change, as long as these marketers stay their present course.n

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