Frager Factor

Tuesday, September 04, 2018

Oprah Turned $30 Million Into $400 Million In Three Years Leveraging Marketing's Best-Kept Secret... Which Leads Me To Nike

Good marketing isn’t about appealing to everyone, it’s about appealing to your core audience. 

Black consumers are an underestimated force in the American economy. 

Oprah understood this and also recognized African American women struggle with the dual challenge of weight control and diabetes which is partly a genetically-driven curse. 

But Weight Watchers ads and images were of suburban white women. This huge prospect base had a problem but couldn't see a solution they could relate to. The brand was dying and the stock feel to $6. 

Something had to change. 

They needed a big jolt and a different idea. 

Enter Oprah as investor and spokesperson.

As Einstein said, "problems can't be solved at the level that created them."  The plan to open a new culturally driven market worked and the stock is now at $73. 

Oprah's $30 Million investment for a 10% stake is now worth $400 Million and DJ Kalhed is stepping into refresh the idea and bring his influence on a whole different generation  of social media connected consumers. 

Which brings me to Nike and the controversy surrounding it.

Nike’s brand has been built and maintained by African Americans and benefits from African American sneaker culture. With $1.2 trillion in spending power, African-American consumers are an important population to grow market share and brand preference. 

Black folks are the original purveyors of “cool.” The shoe industry is a prime example of how African Americans have been trendsetters in fashion and pop culture. 

The face of America is changing. Minorities are soon to comprise the majority of the population. 

The majority of Nike’s 73,000 employees are minorities, with 38% African Americans. 

They are one of the key audiences this campaign speaks to, and it will instill pride and motivate 73,000 social media ambassadors to drive sales in their communities. 

Nike also recognizes that with 43% of the 75 million Millennials in the U.S. identifying as African American, Hispanic or Asian, if a brand doesn’t have a multicultural strategy, it doesn’t have a growth strategy.

Look at their website Nike (.com) -- those images and ethnicities are their targets.

They understand the importance and impact of portraying black men in a positive light, and the power of showing black men as role models in the black community. Likewise, it's evident to that African American males' purchasing decisions are often influenced based on a product's association with a celebrity.

Losing share for the first time to Adidas, they needed a big bold marketing move like Weight Watchers did to jolt sales.

Nike's plan with this campaign is to focus on 12 Key Cities in its Consumer Direct Offense: New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul, and Milan.These are the places the company predicts will generate over 80% of Nike’s projected growth through 2020. Why? Because the company is tapping the biggest, baddest, but old-fashioned data of all: Consumer Demographics. They also symbolize how the company has leveraged what's arguably become its most profitable asset: African-American cool. 

39% of their growth is coming from direct to consumer sales on their website and these are the demographics of the buyers. They wouldn’t have launched this without research.

Not everyone is impressed…or honored. Especially shareholders. But it’s a good business decision that will drive record sales. Because those sales are coming from millennials. And the investors will follow. In fact, right now may be the best buying opportunity to double your money or better.

So what I see is a company using a good marketing strategy that also empowers a generation of athletes and young people to stand up for what they believe in and the changes they want to see in the world:

🏈Shows Authenticity 
🏈Resonates with Target Audience
🏈Shows Support for Athlete Partners
🏈Takes a Stand
🏈Creates Culture 

Sneakers have become a cultural mainstay with the help of hip-hop and basketball over the past few decades. Plus the USA is only a small part of their business. Like it or not we are in a global, diverse economy and the older we get the more disconnected we are and the stranger it seems.

About The Author: Owen Frager is an Internet marketing expert ready to help take your company to the next level.

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