Establishing a Brand
Great brands don't appear overnight; they evolve over time through a combination of timely and insightful decision making, as well as through great, visionary leadership that has the ability to turn potential problems into opportunities.
In 1903, William Davidson and Arthur Harley, 21 and 20 years old, respectively, went into the motorcycle business. Their first motorcycle had a mere two-horsepower engine and was made from scrap metal—including a carburetor made out of a tomato can. The two, along with a friend, consistently tinkered with the product design. By year's end they had sold a grand total of three motorcycles. Through road races and motorcycle contests, the Harley-Davidson name quickly became well known. The entrepreneurs learned much from these events that helped shape the brand, especially that motorcycle riders preferred the thundering noise associated with the bikes, which has since become a hallmark of Harley-Davidson motorcycles.
By the company's 10th anniversary, 200 Harley dealers had opened nationwide and exports to Japan were well underway. Seven years later, Harley-Davidson was the largest motorcycle manufacturer in the world. The brand established and then subsequently reinforced itself throughout business and industry, as evidenced by its motorcycles being used by both police and the military, especially during both World Wars.
By 1947, the Harley-Davidson brand had become synonymous with rebellion and toughness. Those wanting to communicate these traits simply wore the Harley-Davidson jacket, prominently displaying the now familiar orange and black logo. For the next half-century, the Harleys never stopped evolving. The organization always paid keen attention to new technology and widened its customer base by creating low-end $4,400 bikes and high-end $20,000-plus custommade models for corporate executives. However, it wasn't always a free ride. Harley CEO Jeff Blaustein saw the company nearly collapse twice during his 26-year Harley-Davidson career.
Since going public in 1986, the company's share price rose 15,000 percent through 2001, partly because it intensified fandom by establishing the Harley Owners Group (H.O.G.), which has more than 650,000 members who meet at organized motorcycle get-togethers and tours around the country. These events encourage prospective new riders to give a Harley a test drive by offering riding lessons through its "Rider's Edge" program. Forbes named the company the 2001 Company of the Year after it announced record revenue for the 16th straight year.
Although not every great global brand starts off with a tomato can for a carburetor, most indeed recognize the inherent value in, and believe in the marketability of, their evolving—if not entirely unproven—product.
The NBA was created in the summer of 1948 as a 17-team product resulting from the mergers of the Basketball Association of America and the National Basketball League. At best, the NBA was at stage two of the branding process, an upstart league elbowing for position against other, more established sports leagues of all types. Unlike MLB, which was approaching its 50th anniversary, the NHL, which had been in existence for more than three decades, and the NFL, which was coming to the end of its second decade of play, the fledgling NBA was a generic product in search of an identity.
Not only did these established leagues have a tremendous head start in securing the hearts, minds, and wallets of sports fans, they were doing so while cashing in on the evolving importance of the media. By the mid-1930s, baseball was America's sport, its popularity evidenced by the fact that it sold the presenting radio broadcast rights to the World Series to the Ford Motor Company for $400,000.
Similarly, NFL Commissioner Pete Rozelle knew that popularity of his sport was linked to television. Rozelle signed a two-year, $4.7 million contract with CBS in 1962. The NBA was clearly in the NFL's shadows, as television contracts from 1952 to 1962 with Dumont Broadcasting and NBC didn't garner much attention or produce much revenue.
It was evident to the NBA by the mid-1970s that it was no longer competing with other upstart basketball leagues. Rather, it was battling the already established sports leagues for the almighty TV dollar.
The NBA became a virtual hoops monopoly in 1976 by purchasing the rights to four teams from the American Basketball Association, its main competitor. Somewhat unwittingly, it also transitioned itself from "brand as reference" to "brand as personality." Many have said that today's major professional sports leagues don't mesh with the business world because they are monopolies. Because monopolistic power is not set in stone, had the NBA failed to evolve into a great brand, another challenger could have emerged to take a piece of basketball's pie. Although positioned to begin marketing a consistent message that included the publicizing of its teams and star athletes, the NBA still found itself locked in a battle for fan support with baseball and football, which were providing sports fans with memorable World Series and Super Bowls throughout the decade.
On the way to the top, many brands falter. In the face of failure, or perhaps even consistent mediocrity, brands that make it are those that learn to evolve and find meaningful solutions to pressing problems. Many companies that relied on selling products nationwide over the phone or through mail order faced such a moment as a result of the explosive popularity of the Internet. For many of those organizations that failed to allocate the resources necessary to establish an adequate presence on the World Wide Web, surviving in the digital economy became a major challenge.
The NBA's struggle for legitimacy in the early 1980s caused the league to hemorrhage financially, leading it to amass between $80 million and $90 million in deferred payments owed to players and other creditors. In addition to major financial difficulties brought about by rising player salaries and increased travel costs due to league expansion, the NBA was plagued by drug problems and waning credibility—prohibiting it from reaching "brand as icon" status. The NBA's fan base, both corporate and individual, was unwilling to fully embrace the league, for doing so might harm their own reputations and brand names.
The NBA's television partner, CBS, thought so little of the NBA in the early 1980s that game six of the 1980 NBA Finals, when Magic Johnson scored 40 points and Jamaal Wilkes added 37 to lead the Lakers over the Philadelphia 76ers, was shown on tape delay. Game six of Larry Bird's first Finals was similarly tape delayed, so as not to conflict with CBS' broadcasting of Magnum P.I., Ladies and Gentleman, and Bob Newhart. A year later, game six between Larry Bird's Boston Celtics and the 76ers was preempted by a rerun of Dallas, which was followed by Nurse.
It was at this critical juncture in the league's evolution that it not only needed—but also required—a visionary leader who understood the inherent value in brand building.
For any brand to become a good and eventually a great one, it needs more than just a brand steward, it needs a brand visionary. The NBA's visionary has been, and continues to be, Commissioner David Stern.
The NBA has established itself over the last 18 years as a premiere brand under Stern's noteworthy leadership. He previously served as the league's general counsel and executive vice president, which helped him comprehend the NBA's standing in the sports and business industries, as well as the challenges it faced.
Thanks to Stern's vision and skills as a consensus builder, the NBA rebounded and began to gain marketing and financial momentum. This momentum was a direct result of two major developments in 1983 in which Stern, then legal counsel to the NBA, was instrumental. The league implemented a salary cap and established professional sports' first leaguewide drug policy. Had the NBA failed to establish an acceptable level of financial stability and credibility, neither sponsors nor fans would have supported the league by purchasing advertising time or game tickets. This marked the beginning of Stern's keen ability to develop and manage the NBA brand. His brand-building and management acumen was so widely heralded that The Sporting News named him the sixth most powerful person in sports during the 20th century.
Further, by leveraging the NBA's emerging talent—its brand messengers—most notably Magic Johnson, Larry Bird, and, years later, Michael Jordan, and by expanding television audiences, Stern was successful in quadrupling league revenue.
Stern and the NBA were also immeasurably helped by the fact that all but one of the NBA Finals played during his first decade as commissioner included at least one of these stars. Further, from 1980–2002, 22 of 23 NBA Finals matchups featured at least one team in the country's four most populous cities—New York, Los Angeles, Chicago, or Houston. This enabled the NBA to become and remain a sport with personality and success linked to, and reinforced by, a mere handful of superstars and the large markets in which they played.
Some might argue that the NBA was lucky and that its brand was created and subsequently strengthened by fortuitous developments beyond its control—such as having the most desirable teams make it to the finals, the league's showcase that exposed the sport to the greatest amount of (potential) fans.
However, even skeptics who subscribe to this line of thinking must recognize that "good luck" doesn't necessarily or automatically translate to successful brand building. Rather, brand managers who put their brand in position "to get lucky" and know how to capitalize off that luck establish and extend the most revered brands.
A red Swingline stapler appeared in the movie Office Space. Although the 1999 film, which later became a "cult classic," bombed at the box office, it was very successful when it came out on video. The stapler was among the prized possessions of one of the movie's main characters, Milton, who spent too much time making sure none of his coworkers would steal it. As the movie gained momentum as a cult classic, people started calling the company asking for the red staplers. However, the stapler's color was the brainchild of the movie's prop manager and not the company. Consequently, Swingline didn't have any red staplers for sale. The company, rather than shrugging off the situation as bad luck, began making red staplers available and also made them easy to locate by featuring them on the company's Web site.
The NBA and Stern swiftly extended the NBA's brand awareness by creating its own "red stapler," when the league undertook creative marketing and management initiatives that made consumers recognize and remember the NBA. Exciting made-for-TV events like the All-Star Game, Slam Dunk contest, and the NBA draft helped build marketing momentum and contributed legitimacy to the league's first great advertising campaign, which included the brilliant tagline, "The NBA. . .It's 'Fan'tastic!'" He also allocated money and resources to grassroots, public-service-oriented programs, especially those with a "stay-in-school" theme. Stern believed it was never too early to begin cultivating the next generation of fans.
During the years the marketing and advertising campaigns ran— accentuated by the play of Johnson, Bird, and Jordan—average game attendance increased 44 percent to just over 16,000.
From that point forward, Stern continued to craft the NBA's brand image, shaping fans beliefs and positive attitudes about the league. He worked hard to parlay this emerging image into brand equity, creating tremendous goodwill that added to the overall value of the league in the minds of fans and sponsors alike. Once achieved, Stern reinforced the positioning of the brand and leveraged it to make all those associated with sports, especially the broadcast TV networks, brand loyal to the NBA. He did this by adding additional NBA-themed programming, increasing the number and quality of foreign players in the NBA, and implementing a fully integrated merchandising strategy.
Stern's stewardship has been instrumental in establishing, maintaining, and extending important and lucrative league relationships on a global basis. The NBA has accomplished its lofty position by successfully marketing an ever-evolving brand to worldwide corporate partners while creating internal media outlets that protect the brand by furthering its positive perception, particularly NBA Entertainment and NBA.com. Stern understands, perhaps better than any sports executive, that how he and his staff continue to refine and position the brand will determine its long-term viability. However, the more powerful and visible a brand such as the NBA is, the more its image can be tarnished by a collection of seemingly minor indiscretions, breaches in integrity, or lapses in judgment. In some instances, it is a case of the bigger they are, the harder they fall.
Establishing a Brand