As researched in the Neurofocus ESPN Case Study, sponsorships and endorsements have a great impact on consumer interest, causing an increased demand for the endorsed products. The demand for goods increases because the athlete or consumer feels that a certain product is an easy fix or addition to their performance. By buying a certain product, the consumer believes that he/she will receive wanted results similar to that of the idolized professional athlete.
Although Novak Djokovic clearly demonstrated his superiority by winning the US Open singles championship and had one of the best tennis seasons for a tennis player ever, playing with the Head YOUTEK IG Speed racket, Head rackets are not crowding the shelves of tenniswarehouse.com, Golfsmith, Academy, or Sports Authority. The last overwhelmingly successful tennis player to play with a Head racket was Andre Agassi, and before him Arthur Ashe. In contrast, the more popular and well known star of the Grand Slam circuit, Rafael Nadal, has generated enormous market interest with his Babolat AeroPro Drive GT. Rafa is very well known for his extremely athletic style of championship tennis play. Nadal's muscular definition, warrior-like head band, and his long hair drenched with sweat defines him as an athletic icon. Many athletes inside and outside of tennis aspire to achieve the persona of Rafa. Nadal's image and 10 Grandslam titles have allowed him to become an image that can sell products. His racket has become extremely popular among junior tennis players throughout the world. The black and yellow "weapon" known as "Nadal's stick" is a top-seller at popular tennis retailers and internet sites. The demand for the Nadal image has greatly increased the "value" of his endorsed products. It has even lead to the development of look-alike products for little kids with junior rackets. This marketing strategy has allowed Babolat to encroach on the racket share of Prince, Wilson and Head. Consumers aspire to be able to be a champion like Rafa, and look good doing it also. Nadal's line of products accomplishes both of these targets for the consumer.
It is likely that even as Nadal's career declines that his endorsed products will continue to sell well in the market. Nadal's personal appeal, in comparison to that of Djokovic, has been a superior marketing instrument. This is in spite of the fact that Djokovic's level of play at the recent US Open was a quantum above that of Nadal. Nadal's appeal is partially related to his Western-European heritage compared with the more foreign Easter-European heritage of Djokovic.
The ability of Babolat and Nike to increase sales through their sponsorships is a perfect example of increased consumer expectations. The expectations of a consumer to have the athletic edge through advanced equipment have caused a shift of demand. The shift of demand with more people wanting to purchase Rafa's products has completely changed the point of equilibrium for the cost of tennis rackets. Not only are the products greatly desired for aesthetic purposes, committed tennis players feel that if they do not have the product, they are actually at a disadvantage. Tennis competitors at all levels of capability are willing to pay more and more for tennis rackets. Consumer expectations and public appeal continues to keep tennis companies searching for the equilibrium price.
The effectiveness of sports sponsorships and advertising has been studied by researchers of NeuroFocus with regards to NBA broadcasting. Their studies have resulted in proof to show increased focus, attention, retention and overall effectiveness of advertising through sponsorships and endorsements.
Thursday, September 29, 2011
According to recent activity on a reliable blog concerning Apple news, the unveiling of the new Iphone 5 will come with other news as well. The common speculation is that apple will be discontinuing the sale and manufacture of the classic and shuffle models of Ipod. This information must be questioned and using basic economic ideas we can formulate an accurate prediction of the company’s next move. In the company’s last earnings report it was shown that only seven percent of the company’s earnings was from the Ipod. This shows that the public’s demand for a device that solely functions as an Ipod is transitioning as better devises with more functions are made by apple. These newer products like the Iphone and Ipod touch have become substitutions for the classic and shuffle. The newer models have all the same features that these two products valued as their key features. It is possible that the marginal costs of these products have also begun to become higher the marginal revenues for these older products, as the demand slowly shifts to the newer products, due also to a drop in the equalibrium price. Considering this, it seems obvious that there are more costs of keeping the Ipod classic and shuffle around. Therefore, economically speaking, it makes perfect sense for Apple to be discontinuing these relic models of the Ipod.
Wednesday, September 28, 2011
In the CNN article "Tainted cantaloupes linked to 13 deaths, public health officials say," the reporter describes the recent outbreak of deaths caused by consumption of cantaloupe contaminated with bacteria. Contaminated cantaloupe has resulted in thirteen deaths and seventy-two illnesses across eighteen states which all combines into the deadliest outbreak of a food-borne illness since 1998. These contaminated cantaloupes have been narrowed down to originating from a farm called Jensen Farms in Colorado. Even though these bad cantaloupes have been said to have come from just one farm, frequent consumers of cantaloupe are being warned to stop their avid consumption of the fruit. Because of this outbreak of illness and death, the demand for cantaloupe will decrease immensely. Demand will slow and consumers will stop buying cantaloupe from local grocery stores and fruit venders resulting in local venders with an overstock of cantaloupe that cannot be sold, which then causes venders to stop buying cantaloupe from farmers, which in some cases may put some cantaloupe farmers out of business or at least slow their revenue in short term as well as long term. This is a perfect example of cause and effect. One farm produces contaminated cantaloupes resulting in slowing the whole cantaloupe business. Also, this will cause substitutes for the people who consumed cantaloupe. People will begin to chose other fruits instead of cantaloupe. When the people who eat cantaloupe as their main fruit do not buy cantaloupe anymore, they will look to another fruit, maybe an apple or an orange, causing a rise in demand for apples and oranges.
For the first time since 1980 the Detroit Lions are 3-0. We’ve seen the Lions at the bottom of the totem pole the last 30 seasons or so and now suddenly they’re leading the pack. Jamie Samuelsen's blog post, Detroit Lions culture has changed, states that what was needed in order for the teams luck to reverse was a culture change. The energy in Detroit must have been overwhelming on Sunday after the Lions came back from behind to beat the Minnesota Vikings 26-23. With the players and fans fired up about this season starting off perfect, Detroit is changing. Matt Stafford has gone from flop to local hero. More money is going to be pumped into the team through ticket sales, merchandise, and publicity. Those Lions fans from the good ol’ days are going to start tuning in on Sundays and viewer rates are going to go up. The demand for the Lions is skyrocketing. They just might be the new ‘Cinderella Story’ and this will have a financial impact on the city of Detroit that has suffered through the economic hardships of the last few years. More money is going to be circulating through the city and new demands will rise due to the success of the Lions.
Posted by Larson McQuary at 11:21 AM