Friday, January 12, 2007

So, what was your charitable donation to Tiger Woods this Year?

It's a funny question in itself, Tiger Woods, the supreme golfer and marketing god gets his millions from golf and companies, not regular people, right?
Well, no, that's not right.

When companies spend multi-millions on celebrities to make the public think that their products are cool, it's the consumer that actually pays for it. You didn't think they did it out of the goodness of the hearts, did you?

The contract for Tiger Woods was in excess of $100 million over a number of years from Nike. Companies do not invest that kind of money to either lose money or break even. It's all about the marketing and all about selling their brand. But they absolutely do pass that cost onto the consumer.

In a double-dipping sort of way, along with the increased price of Nike Gear compared to other companies, you also get their logo. Their logo is what you are paying for since there is very little difference in the quality of the product.

Here's where the double dip comes in.

By wearing the Nike brand and it's 'swoosh' logo, you are also advertising for them, but unlike Tiger Woods, you are paying them.
You pay extra for that logo and that money goes to the company to recover the investment to pay the celebrity that got you (brainwashed anyone??) to buy the product in the first place.

Tiger makes money, the company makes money and you, well, you get a shirt. It's not like you are on the street, you are in your Nike shirt and Nike cap and you have your Nike bag and someone comes up to you and says "Hey, aren't you Tiger Woods". Why no, I am a middle aged white man with no hair. "But, you are wearing all Nike, just like Tiger"

Taken from MSNBC:
Woods was originally signed to a five-year contract with Buick in 1999. In 2002, Woods was involved in every aspect of the launch of Buick's Rendezvous SUV. This February, Buick re-signed Woods for another five years, in a deal reportedly worth $40 million.
Wray would not confirm the value of the contract, but says that Buick is happy with its investment, pointing out that more than 130,000 Rendezvous vehicles were sold in 2002 and 2003. "That exceeded our forecasts," he says. "It has to be in recognition of Tiger."


So, they put millions of dollars into Tiger's pocket and he pitches the Buick Rendezvous. Then people buy it enough to make Buick happy with the return on investment.
Nice...

But, in all fairness, Tiger 'seems' like a good guy to put the money into.

Charles Barkley would be on the other end of the spectrum.
His outright distaste for any responsibility on being a role model is disgusting. His attitude is 'I do what I please, I sign these contracts to make me money and I don't care if kids look up to me, that's their issue'. So, give me the money and I will have no social responsibility to the kids I influence.

Partially, he's right because athletes and movie stars shouldn't have that kind of influence on our kids, but if you are getting your son a Charles Barkley endorsed product, you are sending a signal to him and the company that you also don't care about their influence he has on your kids.

The last one of the day revolves around my personal favourite, gas stations.
In an effort to make you not think you are getting screwed (without getting dinner first anyway), Gas pumps are equipped with a chart showing the profit to be made by gas. This chart is mostly to set up the notion that it's taxes, not profit that raises fuel prices.

But there is this chunk in there that's called "Marketing", it's about 20%. That's the cost to convince you to go to Shell, instead of getting the exact same product for the exact same price at Esso. They sell you on the convenience store that is attached to most gas stations (where cigarettes and junk food allow them to make a killing on you, but still has no effect on your gas prices), they sell you on gas additives.

If no gas stations did any advertising (much like tobacco aren't allowed to anymore), would you favour one gas station over another? Probably not. You would do exactly what you do now, look for someone who has a lower price or is convenient for your location when you need it.

So, why do we, as the public, put up with such a large portion of the cost of gas going to pay for a message that only hurts you? Well, because no one makes a stink about it.

Sure, we all get those "let's all boycott shell on Thursday" emails and they are dumb.
The idea is dumb because of this.
  1. One day never makes a difference
  2. What if you were to find out that the company people wanted to boycott was actually initiated by the competition
  3. Even if most people did that, creating a lineup at the other stations, there will always be a handful of people that have more money than time and couldn't care less about the price of gas (or they write it off for their company)

When I get those emails, I delete them. I say you will have a much greater impact if you NEVER buy something from the convenience arm of the stations.

"While prices are high, your concessions I will not buy" is my slogan and I have actually used that on people while paying for the gas.

What we should do is get our federal representative to ban gas company advertising like they do with tobacco. According to their chart, that should force the price needed to 'break even' down and either give us a break, or a new run of business into the chart making company. It's a win-win.

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