Please read the following and answer the following questions:
Question 1. Assess Reebok's attempts to develop its brand image in China, using Yao Ming as a symbol and spokesperson. Have they done a good job?
Question 2. What would you recommend?
Article:
Yao Gives Reebok An Assist in China
Long on Sneaker Giant's Marketing Sidelines, Basketball Star Is Now the Center of Its Ads
By MEI FONG September 28, 2007; BEIJING --
This week, Reebok International kicked off its biggest-ever marketing campaign in China with ads featuring its biggest -- or, at least, tallest -- asset here: basketball star Yao Ming.
Using a theme called "Fuel Yao's Unlimited Power," a slew of television and digital ads encourage Chinese consumers to support their hero as he prepares for the 2008 Beijing Olympic Games. But perhaps the bigger story is why Reebok, whose name in Chinese means "swift step," has been slow to use Mr. Yao, having lured him away in 2003 from Nike Inc. Mr. Yao's 10-year contract with Reebok -- estimated to pay him $7 million to $10 million a year -- is one of the most lucrative in the sports world.
Until now, analysts say, Reebok hasn't been getting much mileage from the deal. Four years after signing Mr. Yao, Reebok is, by its own estimates, in sixth place in China's athletic-shoe market, far behind rivals including the leader, Nike, Puma AG Rudolf Dassler Sport and Mizuno Corp. After signing Mr. Yao, a top Reebok executive had confidently predicted that the company could "get to a No. 1 position" in two to three years.
In fact, many Chinese consumers still think of Mr. Yao as a Nike pitchman. He also appears in ads for McDonald's, China Unicom and Visa, among others. "It's never been seared in anybody's mind that Yao is Reebok," said Terry Rhoads, who runs Zou Marketing Inc., a Shanghai-based sportsmarketing firm.
YAO NOW, REEBOK?
Milestones for NBA star Yao Ming and Reebok
• October 2003 Reebok announces it signed a contract with Yao Ming
• October 2004 Reebok launches the first Yao Ming signature footwear collection globally
• August 2005 Adidas announces plan to buy Reebok for $3.8 billion
• 2006 Reebok buys out its distributors across Asia, so it can better control its brand.
• Sept. 25, 2007 Reebok announces its biggestever China marketing campaign -- "Fuel Yao's Unlimited Power," ahead of the Beijing 2008 Olympics
How Reebok, acquired by Adidas AG in 2005 for $3.8 billion, utilizes China's greatest sports star ahead of the Olympics will be an important factor in determining who wins the nation's sneaker wars. Adidas's chief executive, Herbert Hainer, has maintained that China -- where there is at least one Reebok, Adidas or Nike store opening daily -- is critical to the company's overall goal to be top player globally. That's partly why Adidas became a Beijing Olympics sponsor.
With Reebok, which is based in Canton, Mass., Adidas currently holds second place to rival Nike worldwide and in China, and it's catching up fast, thanks in part to its now fully integrated Reebok acquisition; last year, Reebok boosted Adidas's sales by 69%, to $14 billion, about $2 billion less than those of Nike.
Reebok's Yao campaign is designed as a trinity of the star, the Games and the company. It seeks to tap a deep vein of patriotism in China, where citizens are being bombarded with messages that they all have a part to play to make the Games successful -- an idea Reebok hopes will induce the Chinese to shop for sportswear. At an appearance in Beijing this week, the newly married Mr. Yao appealed to fans, saying, "I After paying millions and waiting years, Reebok will use Yao Ming in Chinese ads. and our Chinese team need more and more support from you to help me go towards the Beijing Olympics in 2008."
Paul Harrington, Reebok's chief executive, concedes that until now, there has been "underutilization" of Mr. Yao, who plays for the National Basketball Association's Houston Rockets. He attributes it to Reebok's too-large stable of star endorsers and lack of focus by Reebok's Chinese distributors. "We've been bringing out products [in China] since 2003 with great success," he says. "Has it been to the extent we want? No."
Another reason for keeping Mr. Yao on the marketing sidelines lies in disputes between Reebok and Adidas, according to people close to the situation. After the acquisition, some factions within Adidas wanted to move Mr. Yao to the German brand, arguing it had more resources to promote him than Reebok, these people say. Reebok executives demurred, says an Adidas executive.
Adidas and Reebok say there was some discussion about the possibility of moving Mr. Yao to Adidas, but no dispute.
Now, Reebok appears to be getting back on track. It has slimmed down its stable of stars, moving away from links with entertainers and hip-hop artists and in the process freeing up more marketing dollars. It is devoting some 14% of its revenue to marketing in China instead of the 10% that is average in the industry, executives say.
Also, Reebok bought out its China distributor this year, thereby gaining full control over how the product is marketed. Before that, Reebok had distributor relationships with Symphony Holdings Ltd., a division of Yue Yuen Industrial Ltd., the world's largest athletic-footwear manufacturer, and Swire Pacific Ltd., a Hong Kong conglomerate. Reebok's distributors had controlled the marketing budget and been more focused on capital investment, says Mr. Harrington.
With the new campaign, the company will launch an interactive Web site for Mr. Yao's fans. The company has also created a special logo for the Reebok products Mr. Yao is pitching, a stylized depiction of what executives describe as a monkey. (Mr. Yao was born in the Chinese Year of the Monkey.)
It remains to be seen if Reebok, and Adidas, will be able to match Nike's success in marketing individual stars, such as its campaign with Michael Jordan for Air Jordan sneakers. Adidas has emphasized teamwork, as exemplified in its NBA slogan "It takes 5ive," though it also has individual superstar promoters like soccer's David Beckham.
Nike is also the market leader in China, with an estimated $100 million in sales. But Adidas -- which doesn't break down individual sales figures by country -- says it will be the market leader by the 2008 Olympics, with projected China sales of $1.28 billion by 2010, says Mr. Hainer.
Reebok's China sales are growing compared with U.S. sales, where mall-based retailers are struggling. According to Reebok's China manager James Zheng, Reebok's sales have grown by 45% this year, and will grow by 55% next year. (The company doesn't break out individual sales figures now, but had about $30 million in China sales before Adidas took over.)
Reebok became famous in the 1980s with its range of women's shoes that capitalized on the aerobics craze. Much of its success was due to its charismatic former chairman, Paul Fireman, who bought the U.S. distribution rights to the little-known British brand for $65,000 almost three decades ago.
But the brand faltered in the late 1990s as Nike gobbled up market share and Mr. Fireman focused on realestate deals. In 2003, Mr. Fireman started aggressively wooing Mr. Yao, then under contract with Nike, which was paying the rookie NBA player about $100,000 a year, according to people familiar with the matter.
Brook Larmer, author of "Operation Yao Ming," a book on the star, says Nike was expected to up its offer to Mr. Yao but dragged its feet. Traditionally, shoes endorsed by taller players such as the 7-foot-5 Mr. Yao haven't done as well as those endorsed by shorter players, such as LeBron James or Tracy McGrady, whose flashy footwork -- and hence footwear -- is showcased on television.
Mr. Yao says he's familiar with the sportswear-industry adage "Big Men Don't Sell Shoes." "But I want to give it a try," he says with a grin.
--Sue Feng contributed to this article.