Co-branding, Jeep and Call of Duty, Black Ops

Christmas brought on a whole new series of blog posts and this one I will credit to my nephew and my brother in law.  My nephew got a PS3 for Christmas and my bro in law bought himself Call of Duty Black Ops... good for him, never lose your gaming side.

What makes this game unique is the game play, the realism and the pure grittiness of it.  It's a man's game and is designed for 18-40 year olds (I know it's a broad range but hear me out).  It features realistic operations and has had a success with the Call of Duty franchise, starting with the original Call of Duty.  What is interesting is how the gaming world has targeted the older market.  This is because serious gaming has been around for some 20+ years and first person shooters have been around for at least 15 years with the first and possibly still the best being Golden Eye 007 for the Super Nintendo.  This age group that started at a young age playing these FPS have now grown up and many are in their late 20's to early 30's.  They have jobs and have continued to mature with the gaming consuls. 

With COD Black Ops another company decided that they wanted the exact same demographic and figured the same people would use their product also.  Jeep jumped on board for this one and on the surface it looks like a great pairing.  Jeep was originally founded for WWII as an all-terrain vehicle to go anywhere so it's fitting that they get back into the military albeit by way of an imaginary gaming world.  If you take look at the Jeep site here you can see that it is pretty spot on with the imagary of the game and the sounds of the background are pretty fun also.  The claim that Jeep makes is that it's the only vehicle tough enough to play in the COD Black Ops world.

What's even more fun is that Jeep has released a COD Black Ops Edition.  This is the four door Jeep Wrangler Unlimited (also a two door version) with an upgraded package almost exactly like the Rubicon package.  It has a couple of things that they claim are different about this package and it runs for about $1,500 - $2,000 more.  It has some alloy wheels, big nobby tires, light covers, fuel door cover, and painted black with the Black Ops logo.  The thought is that people who like the game so much will like anything associated with it and will pay the extra money for the look and idea that they are associated with it.  It is a classic case of co-branding and bumping up the price.  Is it worth it?  Well, that's up to you.  If you feel like it's worth $2k to drive a vehicle that is in a video game that you love and you really like the look, then yes.  If you just want the normal version (Rubicon) and want to save the money and put it to use somewhere else... then no.

In the end it's a brilliant branding idea.  I like that both of them agree that they are going after the same demographic and that the "tough, outdoor, adventure seeking, military loving, gaming guy" will buy the Jeep that Chrysler paid to feature in the game.  It's funny how the money thing works.  Car companies will do whatever it takes to sell cars.  The gaming industry really doesn't need the cars but it works out both ways because of the marketing exposure they both get.  The COD franchise gets a level of credibility by associating itself with a brand like Jeep and for Jeep's part it gets a chance to be associated with something that moves a lot of product and can be associated with the COD brand.  It works out both ways.  Jeep tried to do something like this before when in 2004 they launched their Jeep Wrangler Ulimited which back then was an extended bed for more leg room and cargo room.  The movie Sahara (2005) with Matthew McCaunahey featured the Jeep in a part of the movie.  The movie really never did take off and the thought of creating a franchise of movies from Clive Cussler's hero Dirk Pitt died as well when Cussler tried to file a law suit against the movie company which ultimately made everyone gun shy to do work with Cussler.  (Tomb Raider in 2003 featuring Angelina Jolie also had the Tomb Raider Jeep, and Terminator 3 also featured a Jeep but both came with significantly less fanfare)

Jeep left it alone and pulled the commercials and didn't really do much else with it.  It was positioned to be a blockbuster but in the end didn't deliver what many thought it should have (on a side note, I love the movie and watch it at least once a month!).  Cussler had written many times about Jeep in his novels and the marriage seemed like a great one.  The only variable was the movie company which threw everything off.  As a second round of co-branding Jeep did a great job of finding a name/franchise/brand that would be great to work with and more than willing to accept a little cash and allow Jeep to use the name.  Well done Jeep and Activision (the company that makes COD).  This one looks like a winner.

Update 12/31/10:  I saw an ad for the Jeep Wrangler Black Ops edition in the January issue of Outside Magazine... it's the target market.

Two companies one product... Smartwool vs. Icebreaker

When looking at these two companies the differences are definitely visible. I visited both sites and the experience is completely different. Let me back up, in case you don't know what these two companies make/do I'll explain.

These are both clothing companies, they make base layer clothing, socks and other apparel but the core is the base layer. The companies focus on the use of wool as the tried and tested base layer of choice. History has it that wool has long been a great wicking fabric great for outdoor activities where staying dry and keeping warm are essential. My father in law has a saying for wool "Cotton is rotten and wool is cool". Basically cotton doesn't wick and you end up with a foot that looks like a prune if you're skiing.

Based on this manufacturers found that using polysester to create a wool like feel also worked well to wick away moisture. Under Armour has made an absolute killing using this theory. As in all things supply and demand take over and when wool became affordable again but could command a premium price it came back into play. R&D departments aka skiers and outdoors people always knew that wool was a great way to go, really warm, durable and wicked away moisture (oh yeah, and it's green). When a new way to produce it came around and the itchiness went away boom! A new line of products was born.

Founded around '95 Smartwool was the first "brand" to hit this market. It is a fun little brand with a cartoon character for the logo and a fun bright user interface on the website. The products are packaged as a happy go lucky type of product much like "Life is good".

Icebreaker has been in the market since around 1994. The brand is a chic and stylish brand with strong imagery to back up claims of the best base layer in the world. It has a refined, progressive almost European look to it and with images of half men half ram and naked women riding them you get a Calvin Klein feel when you look at it.

Both companies use Merino wool. Supposedly the softest, strongest, best wool on the planet. Both have two different ways to capture the same market. Outdoors people who spend money on premium brands. Don't let the cartoon character or the man ram fool you, both command premium pricing and both are doing what they have to do to get you to buy.

In 2005 Smartwool was acquired by the Timberland company. Icebreaker had sales of $100 million in 2010. Neither are hurting for cash and both want to sell. During the outdoor retailers expo in Salt Lake City I commented how Icebreaker had caught my eye with the imagery and the idea (last year). I'm still waiting to see what these guys do for an encore and what they are doing to push their product. In an earlier post I mentioned how companies like The North Face and Mountain Hardware don't need to do much in terms of spending but for a company that is still trying to gain top of mind advantage a decent spend is essential. They could opt for the push method and market directly to customers or they could utilize the interesting dynamics that exist with outdoor retailers and get it in the store, make a presence there and let the store do the advertising for you.

Smartwool has been smart. In a recent trip to Cabela's I saw Smartwool products (only socks). They have created a large enough brand for themselves and have crossed over from simply non motor powered outdoor retailers (think REI) to all aspects of the outdoors. Icebreaker has not made it into the Cabela's type stores. In fact on a recent visit to REI the Smartwool brand had a commanding edge on Icebreaker in terms of SKU's and shelf/rack space. I had a hard time even finding the Icebreaker brand. When I did it was in a small disguised section of the store. (In Icebreaker's defense, Europe is their largest market right now with 1/3 of their sales being there)

If I had to bet I'd say that neither of these guys are going away. It'll be interesting to see how they continue to position themselves. I could see Icebreaker moving into a mod retailer or making a strong push with the current branding into Cabela's type stores and making a bigger splash in the REI's of the world.

For Smartwool... they'll just keep on selling. That's what they do, good product, fun brand, and good marketing. I see them getting bigger and capturing more of the market. They'll likely push for an even bigger presence in the current retailers.

The ace in the hole... online sales, how are they going to attack those? Do they make a push with the Backcountry.com's of the world? Do they do strategic campaigning leading to their websites? The future will tell. Until then, two companies, one product... good times.

Why outdoor goods companies can avoid big media spends.

I was in REI last night and it is always astounding to me, the types of crowds that come in that store. They fit in a nice little box and all have similar traits. They do come in all shapes and sizes, but at the core they are all the same; Love the outdoors, a little crunchy, and willing to spend money on products they think will enhance their outdoor experience/image.

The products you see on the shelves in REI are very well known brands. The North Face, Mountain Hardware, Arc Teryx, and others. But the interesting part to all of this is that they never seem to advertise with big media spends. You won't see a North Face commercial during a Super Bowl, you won't see a spot for Mountain Hardware even on the Outdoor Channel (that often). The reason for this is the fact that they know their audience and know how to reach them. The channels that touch these types of people are much different than a typical Nike, Coors, or GM channel.

The channels that do touch these people all involve the outdoors. It can be through an outdoor retailer, outdoor expo, outdoor event like a race, a climb, or an expedition. Specific videos, messages and placement of ads are the most effective way. Spokespeople are very important in this industry. If someone has used the Eddie Bauer First Ascent line and raved about it during an Everest Summit or the new Mountain Hardware softshell is phenomenal on the slopes during the spring, then the product has a following. This is sometimes caused by the the spokespeople.

These people (the spokespeople) are different than Lebron James or Peyton Manning, they are cult heroes in the world of outdoors. They are everyday people that aren't 6'8" and 260 lbs with some of the most incredible athleticism to grace the earth. They are people who have guts, the ability to stick to it, train, and are visionaries. All outdoors people alike deep down feel that they could be that person if they really wanted to. The spokespeople are the silent celebrities in the world. They are the ones pushing products through actions. What they wear the people want.

Spokespeople are just one channel. The function of the product is important too. It's all about how the product is going to make your turns better, your summit greater, or your day longer. This is communicated through a target message, a quick story, a website and word of mouth. Online retailers are big advocates for many of these companies. Backcountry.com is a huge North Face retailer and through their emails and online messaging it's seen. But if you weren't an outdoors person, you would never know about Backcountry.com, you wouldn't see any kind of advertising for The North Face. Sure you'd see some ads in Outside Magazine or Ski Magazine but even that is a targeted audience and all of those people know Backcountry.com

Advertising costs are low for the outdoors companies. They usually let their quality and brands speak for themselves. They leave it to the retailers to do the majority of the advertising. It's such a different model than a traditional consumer packaged good. Think of the Disney Channel advertising Nerf dart guns or a cereal for kids, those manufacturers are paying incredible amounts of money to get their products out there. They are making the kids aware of the product that is in turn purchased from WalMart or Target. The opposite is the case with REI, Dick's Sporting Goods and others. They advertise for the companies. The quality brands bring credibility to the store.

In the end it's an interesting business model. Start up brands have to spend, but the big boys don't. You would think they are printing cash, and probably are but there are a few things to be considered. First the reasons why they are not printing cash then why they are.

Why not:
1- Big overhead with R&D, Spokes people, quality products cost more to manufacturer.
2- The market is very finite, for Arc'teryx the amount of people who want to spend that kind of money on a product is probably very small.
3- Unless you have used the products you probably don't know that there is a difference in quality... many people right now are very price conscious and shop at WalMart for everything.

Why they print money:
1- Low advertising and marketing costs (typically this is anywhere from 4-10% of budgets for companies) This means that they have an automatic 10% going right to the bottom line.
2- The finite group spends money (recent study shows that outdoors people spend $400-$1,000 a year on outdoor goods).
3- The margins are still pretty darn good especially on soft goods. Usually around 60%.

All of that being said it seems to be working for them. They don't need to spend on advertising and are still turning large profits. Conglomerates like the VF company own brands. The North Face is owned by the VF company because it turns profits. The model is working, by not advertising with big spends and target their market they can keep their costs low and meet the audience head on.



 Here is a little post script to follow up.  I was watching TV and saw a commercial for The North Face during prime time.  I was taken back for a second thinking I'd completely blown this post, but then it took on the feel of a different type of commercial.  Ultimately it was a Dick's Sporting Goods commercial saying they feature The North Face products.  This is very common, and companies like TNF are more than happy to let them advertise their products for free.  As long as the outdoor companies continue to make quality products the Dick's, Sports Authority, and others will continue to advertise for free!

Sports team's names and their brands, the anomoly part 2

Back by popular demand here is round two of Sport’s teams and their names and the branding that goes with it. Basically I’m just going to pick out a few names that make sense and well, if like their mascot. As everyone knows, I am a Boston area homer and will try to avoid too much about them but if needs be I’ll let you know. On to the groupings:

The “wow, I don’t know why I should be intimidated group”.

The Steelers, ok, Steel town, I get that but I am so far from being intimidated by a greasy steel worker especially from a city that is dead that I actually laugh when I see the pride these people have in the name. (again, goes to show, names don’t mean anything, and I hate the Steelers)

The Ravens, (I got the first two from the Sunday night match up) I don’t know what to think of this ugly scavenger bird. I know it has to do with the old/Catholic/legacy thing going on in Baltimore or maybe they just thought, “hey, we have the Orioles, what’s another black bird that doesn’t strike fear in anyone’s heart?”

Cleveland Browns (I swear I’m not picking on the AFC North… they just have some lame names is all). Ok, the debate is on, do they have the name because A- Paul Brown used to coach them? Or B- Because of the uniforms they first issued and it just stuck? I like the unis, but when I hear Browns… I don’t shake in my shoes.

The PC (politically correct) group… Lame that we have to do it and these guys don’t care!:

Washington Redskins, well, could you imagine The Whiteskins? The Blackskins? The Yellowskins? I can’t but for some reason in the most political place in the world the Skins have managed to keep their name. Good for them. (Another side note, I grew up on a Native American Indian Reservation, I’m not a native but I have many friends who are and funny thing, they call each other Skins). I love the logo but how they have gotten away with it for this long I’ll never know, but more power to them!

Kansas City Chiefs, See above, still, Arrow Head Stadium, an arrowhead on the logo… I like it and certainly there was a large native influence in the planes area for years.

Utah Utes, This one hits close to home. I see the stadium from my house and I grew up with Utes… when the whole PC thing with natives was hitting full steam the University went to the tribe and asked them if they were offended… they said absolutely not and we love it! It’s an honor… good for them. (Also falling in this category is Florida State Seminoles, University North Dakota Fighting Sioux, both tribes thought it was an honor and didn’t want their name removed).

Central Michigan Chippewas, kept it.

University of Illinois Illini.

Atlanta Braves, This one is much like the other ones… glad they kept it.

Cleveland Indians, Well, it doesn’t get much more plane than this… although you could argue that if there was a dot and not a feather it could possibly mean someone from Mumbai… just a thought.

Succomed to the PC pressure group: In a poll done by the University of Pennsylvania, 91% of Native Americans were ok with the team names… lame how left always has to push it to the next level.

Arkansas State Indians, oops I mean Red Wolves. What used to be a tribute to the Osage Nation is now a fictional character that may or may not walk around the campus… you just never know.

Numerous colleges and universities had Native American mascots or monikers… that’s all changed.

Dixie State University Red Storm, It started as a Mormon school back in 1911, located in Utah’s Dixie it eventually became a state entity and went along with the Rebels of the South theme for their mascot. (A la Ole Miss). When the school got a reputation for a party school because of the warm climate and favorable police activity the school wanted to turn things down a little (you’ll never hear it from them though) and went with the “Red Storm”… ugh.

Washington Bullets/Wizards, DC can be pretty violent at times and to avoid promoting it the team changed the name to a mystical character that has nothing to do with anyone except for the select few World of Warcraft players out there.

The intimidating/warrior/I don’t want to mess with you group,

Tampa Bay Buccaneers, It’s just cool, the whole thing they have going on there. The ship, the pirate logos… and they are pretty good this year. Intimidating logo for sure.

Pittsburg Pirates, they may be the Keira Knightlys right now but they have been good and the logo is great… pure, true… although, how many pirates do you see on the Three Rivers there?

The Minnesota Vikings, I love Vikings, not The Vikings but regardless, the Vikings were always seen as fierce warriors that didn’t back down, raped, pillaged and pretty much did what they wanted to… oddly enough sounds a lot like the modern day Vikings… Thanks Brett.

Texas Rangers, I know they were in the last post but hear me out… the Texas Rangers (Tommy Lee Jones and Robert Duvall style) were some of the toughest hombres around, no one in their right mind ran from the law w/ these guys on their trail. It’s a far cry now but hey, good mascot.

San Diego Padres, if you’re a sinner and you’re religious you know what I mean on this one.

Chicago Bulls, Pretty much the only “Tough” looking mascot in the whole league… Chicago was once a crossroads of the cattle industry, so this works… and we know how mean a bull can get right?

Idaho Vandals, I’m throwing this one out to my boy Dane. He is one of 47 Idaho fans but he is lucky in that he really does have one of the coolest/meanest/most ferocious mascots around. An East Germanic tribe during the 5^th century known for sacking Rome and being incredibly ferocious and numb to pain… hey sounds like they need some of those guys on their football team.

As I said before… no one really cares what the logo is in sports, as long as the team plays well it’s fun to buy the garb, yell stuff and look like an idiot. I think it’s really fun when the name means something and lines up with the city or school. But you never know, you could just change it a few years down the road if it’s not working for you (see The Kansas City Wizards… I mean Sporting? And I haven’t even touched Soccer or Futbol team names).