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Superstars’ Endorsement: The Tiger Wood Case

written by Jose Noguera - jose.noguera@halliburton.com

The number of companies building or repositioning their brands equity by linking them to sport superstar’s powerful images keeps growing over the years. This method of levering secondary association has always been a common practice in United States and Europe but now days is becoming a global factor.

The concept is very simple, companies offer sport superstar lucrative endorsement contracts in exchange of using their high level of popularity and images to build or redesign their brand equities and reposition their products in specific market segments. Though is seems to be the perfect win-win situation, the stakes and risks of the companies are much higher than the superstars, why? Basically because with these associations, companies make a long term commitment in which individual(s) became an integral part, if not, the main component of the brand strategy and the integrated marketing communication plans.

As long as the companies’ marketing goals and strategy are met and there aren’t negatives changes on the superstar popularity this marketing associations work perfectly, but what about if all of the sudden that one day powerful and popular super athlete become the target of a major scandal? or commit a felony? Or just simply stop being that role model person in whom the companies place their most value assets “their brands”?

Throughout the years several companies have faced this problem with several super athletes, which resulted in endorsement cancellation in probably all the cases. However the case in discussion on this article had different results, perhaps because involved the most famous and most powerful athlete in the world and probably in the history of any sport, “Tiger Wood”.

Tiger Wood made history, in the world of golf and sports in general, when he won his first major tournament at the age of 22 becoming the first African American to win a major tournament in the professional golf association (PGA). This was a turning point for a brilliant professional career that can be summarize in 73 PGA titles (3rd of all time), 14 majors tournament (2nd of all time) and 16 world golf championship (1st of all time). As expected all these professional achievements led to a significant number of endorsement contracts with very larges corporations: Nike, GM, At&T, Tag Hever, Gillette, Accenture, EA sport, Pepsico, etc. These contracts made Tiger Wood the first athlete to earn $1 billions.

These companies redesigned their marketing communication strategy and use new communication media (Golf tournaments) and new brand ambassador (Tiger Wood) to enhance their brand equity with results that couldn’t have been better. Nike Golf is the most prominent example of Woods’ brand association. When Nike signed Woods to an endorsement deal in 1996, it didn’t have a separate golf unit. It launched one in 1998, with Woods at the center of its marketing push. Last year, Nike Golf posted over $600 million in sales. It is now the biggest golf apparel company in the world.

In November 2009, Tiger Wood association with the above mentioned companies and their brands was at the highest levels of synergy and harmony; however a domestic incident that will turn into sexual addition allegations broke the harmony and led to the discussion point of this article “Why some brand leave Tiger and other stand behind him? Days after the scandal, Pepsico (Gatorate), AT&T, and Accenture cancelled Tiger Wood contracts, while Nike, EA sport, Procter & Gamble and Tag Hever decided to keep the endorsement while minimizing the exposure of Tiger to their brands.

In any other case the companies decision would have been to immediately terminate all the contracts, however in this case the decision was not straight forward, mainly because of Tiger Wood huge selling power. In my opinion the companies that decided to cancel the contract made that decision because they forecasted low impact on their sale revenue. In fact Accenture, AT&T and Pepsico reported less than 2 % drop in sales after cancelling the contracts. The forecasted impact in the other companies didn’t tell the same history, In fact, some of those companies projected drop in sale up to 20 % had they cancelled the contract with Wood. Under these conditions the only alternative was to keep the contracts and make the necessary adjustment to minimize the effect on their brands.

Although the brand association to superstar has proved to be very successful strategy it has also proved to be very risky for companies, especially if only involved one superstar. Having said that, I truly believe the Tiger Wood case will change how the companies approach this particular marketing strategy. In my opinion the way forward is to associate the brand to different superstars, which it will make it less vulnerable to issues discussed in this article.

In summary we can say that Tiger Wood revolutionized and projected the golf as one of the major communication media for several companies though it powerful selling image. We can also say he potentially change the way that companies will approach endorsement in the future in order to eliminate any dependency effect.

One Comment on "Superstars’ Endorsement: The Tiger Wood Case"

  1. Afful Basri says:

    In regards with the Tiger Wood case, we may take a lesson to always maintain the good I-Brand. It’s proven that after his “negative private life” is blow up his brand is becoming negative deteriorating his career where almost all his business partners withdraw their sponsorships.