Reebok: UBU, ERS & the 1988 Communication Plan
Evaluation of Reebok's 1988 communication plan. Covers strengths and weaknesses, consumer buying process, market segmentation, and the umbrella brand decision.
Why has Reebok been successful?
Reebok has been successful for a few reasons, including product innovation and the rapid expansion of its diverse product line.
Product innovation has been a key factor in growth. Reebok introduced the first aerobics shoe specifically built for women, which allowed them to capitalize on the fitness trend in the 1980s. The rapid expansion of the product line allowed for a period of growth unheard of at the time. Between 1982 and 1987, net sales grew from $3.5 million to $1.4 billion.
Strengths
- First aerobics shoe designed for women.
- Aggressive product line expansion across athletic categories.
- Strong brand recognition in casual and lifestyle wear.
Weaknesses
- Over-reliance on outsourced manufacturing, leading to a weaker supply chain. A majority of Reebok manufacturing took place in South Korea.
- Increasing competition from Nike, which skyrocketed from Air Jordan.
- Reebok ended up struggling in terms of total market share and athlete associations against the brand Nike had built.
Consumer buying process and market segmentation.
Consumers buy products based on various factors. For athletic footwear, they include comfort, design, health factors, and price. I segmented the market into three groups.
Segment 1, Serious athletes
A smaller market share, but they use the products for optimal performance.
Segment 2, Casual athletes
The largest portion of the market. Use the products for occasional activities. Buy on athletic credentials but won't pay for elite-tier technology they don't need.
Segment 3, Casual wearers
Prioritize style and comfort rather than athletic performance. The segment Reebok's lifestyle line and UBU campaign were designed for.
Evaluating the 1988 communication plan.
The proposed 1988 communication plan included three major campaigns:
- "U.B.U." aimed at the younger generation. Useful for reinforcing the image of Reebok as a stylish brand rather than an athletic brand.
- 1988 Summer Olympics. Reebok paid $6 million for advertisement during the 1988 Summer Olympics. Done to generate exposure among athletic enthusiasts.
- "ERS" used by Reebok to focus on technological advancements, to directly compete with Nike's new innovative products.
The 1988 communication programs addressed the problems faced by Reebok, both fashion-conscious and athletic. Their success depended on how the programs were executed.
Umbrella brand vs. product-specific advertising.
Reebok would benefit from running an umbrella brand campaign in addition to product-specific advertising. The two do different jobs.
The UBU campaign allows Reebok to use its newer product lines to create the identity it wants. Product-specific ads can highlight the important features of individual shoes. Creating want in the younger generation was done with fashion-conscious products, and for athletic needs Reebok created campaigns like ERS.