Question

World no.1 Rafael Nadal is to succeed football icons David Beckham and Cristiano Ronaldo as the male face of Emporio Armani Underwear and Armani jeans.

The 24 year-old Spaniard is now building a massive portfolio of endorsement deals with concerns such as Richard Mille watches, Mapfe SA (Spain’s largest insurance company), Kia Motors, Lanvin fragrances and of course Nike Inc. and Babolat.

Even the most conservative estimates maintain that Nadal’s commercial appeal will boost his annual earnings to somewhere comfortably in excess of $US 40 million a year. With three major titles to his credit in 2010 he has collected $10,171,998 in prize money alone.

Simon Chadwick, a professor of sports business strategy and marketing at the Coventry University Business School in England, confidently predicted: “Nadal will even transcend the Federer brand.”

Nadal’s first campaign shots for Armani will not be released until in the New Year and the decision to switch sporting focus for its’ underwear brand from football to tennis is seen as a bold move in a sector of male fashion that is worth more close to $US 10 billion a year.

Armani’s campaign involving Real Madrid and Portugal star Ronaldo was deemed a success across global markets. Other fashion companies including Milanese rivals Dolce and Gabbana recruited the entire Italian World Cup squad.

The only tennis player to previously make a global impact on the underwear market was Bjorn Borg who started his own brand in Sweden that became a worldwide concern. Patrick Rafter is the current image of Bonds underwear in Australia.

Interestingly, no one at Armani seems to realize the irony of signing Nadal who is notorious for taking time between points for readjustment because he habitually seems to struggle with the fit of his underwear.

1. Discuss the link between a brand image and pricing strategy.
2. Discuss the advantages and disadvantages of using social networks as part of a promotional campaign.
3. Discuss the advantages and disadvantages of celebrity endorsement in the promotion of fashion brands.

Answer 1

Price comparison is when reducing the price of an item.when the items go on sale ,brands often list the 'RRP' on the ticket,followed by reduced price.

Unbundling is art of pricing items as independent rather than as packages.

Dynamic pricing is that when increased pricing during busier buying is great way to boost revenue but its flaws.

Flat pricing is the reverse idea of dynamic pricing .it means the price drops significantly during slower periods and increase during busy times.

2.Advantage of social media:

-reach a high number of potential customers

-increased sales

-increased traffic to your website

-reducing marketing costs

-opportunity for customer feedback

Disadvantage of social media:

-additional resources may be needed to manage your online presence

-needs daily monitoring

-if you don't have any social media,you may not see any real benefits about social media.

-risk of unwanted behaviour on your site,including bullying and harasement

3.Advantage is that builds credibility,make your brand stand out,open your new markets but Disadvantage is that celebrity image changes,they may overshadow your brand ,endorsement are expensive.