February 1, 2018

Halep & Adidas: a case study for marketing

The Romanian tennis professional Simona Halep was the No. 1 player on the WTA Tour as she entered the Australian Open in January 2018. The news is that the 26-year-old doesn’t have a clothing sponsor for 2018. And it is a fact that top tennis players get millions of dollars worth of sponsorship contracts which usually run over a couple of years. So how come Halep had no clothing sponsor as she was entering one of the most important tournaments?

After she had been sponsored by Lacoste, Halep joined the Adidas family in April, 2014. Four years later they parted ways in December 2017, just two months after her becoming world No. 1.

Rumour is that her representatives asked Adidas for a higher sponsorship when their contract ended since she was now the world’s top-ranked player. When the offer was refused, the Romanian’s team sought sponsorships elsewhere. But when they failed to find a better deal and returned to Adidas, the company refused the original deal, saying that they already had allocated their yearly budget. Adidas didn’t renew Halep’s contract.

If one is marketing a brand, a company’s shares or anything which is scarce in the market, there are two points one has to pay attention to:

1- Never declare a price first. If you say it, you usually have to settle for less or won’t even have an agreement.
2- Auction whatever you are selling by inviting all the interested parties at the same time. Only then you’ll be able to find the maximum value.

One should not market something scarce like a standard product/service. For example: a 50 cents pen sold at every corner shop might go in an auction for a very high price if it has been used by a deceased famous music star.

The oldie of the week: The Seekers – I’ll never find another you (1968)

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