Organizing for Advertising and Promotion: Role of Ad Agencies and Marketing Communication Organizations

Topics: Advertising, Marketing, Brand Pages: 78 (24530 words) Published: August 24, 2013

To understand how companies organize for advertising and other aspects of integrated marketing communications. To evaluate the advantages and disadvantages of the various ways companies organize for advertising and promotion. To understand the role of advertising agencies and the services they perform as well as the various types of agencies and media specialist companies. To examine methods for selecting, compensating, and evaluating advertising agencies. To explain the role and functions of specialized marketing communications organizations. To examine various perspectives on the use of integrated services and responsibilities of advertisers versus agencies.







Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations

Adidas, Puma, and Reebok are well known brand names in the athletic shoe and apparel business and have one thing in common. They have all been trying to keep pace with Nike, the Beaverton, Oregon, based company which has global sales of nearly $20 billion and whose swoosh has become the most pervasive logo in sports. However, when asked to name the competitor that has the most realistic chance of challenging Nike, many industry analysts do not mention adidas (which now owns Reebok) or Puma, both of which have been competing against Nike for decades. Instead they point to Under Armour, the young Baltimore-based company that many have already nicknamed “the next Nike.” Under Armour (UA) was founded in 1996 by Kevin Plank, a former Maryland football player, who began by selling compression clothing that could “wick” sweat away from the body to college sports teams out of the trunk of his car. In 2005 the company went public and its stock nearly doubled the first day it was traded. Under Armour has averaged nearly 60 percent annual growth and had sales of $725 million in 2009. Under Armour achieved initial success by focusing on niche markets that the big boys overlooked. The initial product—a line of tight-fitting T-shirts made of a synthetic compression fabric—targeted professional athletes and fitness buffs, offering them a way to stay cool and dry during workouts and games. The product line has been expanded to serve a variety of sports and activities markets including running, football, baseball, soccer, lacrosse, hunting, and snow sports. Under Armour became very successful through strong branding and product positioning, quality products, and dynamic advertising. The company developed a unique brand identity through its TV advertising campaign, which began in 2003 and used the theme “Protect This House.” The commercials featured a football squad huddled around Eric “Big E” Ogbogu, one of Kevin Plank’s former teammates at the University of Maryland, who was playing for the Dallas Cowboys when the commercial was shot. The spots show Ogbogu and a number of other well-conditioned athletes working out while wearing Under Armour and end with him standing in the middle of a huddle of the players and shouting “We must protect this house!” as if his life depended on it. “The goal was to create a spot that would live longer than its 30 seconds on the air,” according to Steve Battista, Under Armour’s Vice President, Brand. This goal was definitely accomplished as the tagline has become a symbol of what Under Armour stands for as a brand and the company continues to use it in much of its advertising. Building on its strong brand reputation, Under Armour made a strategic decision to expand into the football cleat market in 2006. To launch the new product line in this highly competitive market, the company’s in-house agency developed the “Click-Clack campaign which engaged viewers with the sound of football cleats in the tunnel as players head onto the field. While there was no direct mention of Under Armour cleats in the initial spots,...
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