Question

A few years ago Nike entered into a long-term agreement with Red bull that included, among other things, joint promotions. From Nike’s perspective, and from your information about the two brands, was this the right decision? Is there any downside? Please explain by using relevant marketing insights

Answer 1

In my opinion, it was not a right decision from Nike's perspective to enter into a long-term agreement with Red bull and conduct joint promotions. This is because Nike is into a different line of products and is associated with sports equipments, shoes, clothes etc and Red Bull is into energy drinks which is a different segment altogether. Although we can relate sports equipments with energy drinks since both are used by sports players but as a long term strategy, due to less congruence among the two brands and different line of businesses, limited success shall be achieved as a results of joint promotions by both companies. Brand management and marketing promotions also become major challenges while formulating joint promotion strategies. Also strategies have to be made in accordance with customer demands and preferences and if one brand gets affected due to shift in customer demand, it creates affect on the other brand as well in the long run. Hence marketers have to be extremely careful while implementing a successful strategy.